Question

How is the market demand at a particular price calculated?

Options

• By multiplying the price by the number of sellers

• By subtracting the lowest household demand from the highest

• By adding the quantities demanded by all buyers at that price

• By averaging each buyer's price preference

Answer 1

By adding the quantities demanded by all buyers at that price

Explanation:

The market demand at each price is found by horizontal summation, adding the amounts each individual wants at that price.