Explain how a market demand curve is constructed
What will be an ideal response?
The market demand curve is the horizontal summation of the individual demand curves. A price is selected, and the quantities demanded of each person at that price are summed. Then another price is selected and the quantities demanded of each person at that price are summed. Continue doing this for other prices until the market demand curve is traced out.
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Use the following statements to answer the question:
I. Consider the problem of negotiating the price of a rug that costs $100 to make. If there are two buyers (one with a maximum willingness-to-pay of $200 and one with a maximum willingness-to-pay of $250 ), then the situation is no longer a constant sum game. II. The likely outcome from the game described in statement I is that the second buyer will bid a price slightly above $200 (e.g., $201 ) to win the rug. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.
Increases in income from sources other than employment can cause the labor supply curve to shift to the left
a. True b. False Indicate whether the statement is true or false