Consider an economy populated by 3 individuals, each with an iden- tical demand for good y, yd = 10 − py, where py is the price of y. Suppose further that the marginal cost of producing y is $5 per unit.
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Step 1
Since each individual has a demand function of yd = 10 - py, the market demand can be calculated by summing up the individual demands: Market demand = 3(10 - py) = 30 - 3py Show more…
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