Derive the market demand curves

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Now consider the market for Harry Potter books in Privet Drive where there are two types of consumers. The first type love Harry Potter books and have an inverse demand curve of P = 10 - 0.5Q. The second type are fanatics and have an inverse demand curve of P = 30 - Q. There are only 2 consumers in the Privet Drive, one of them loves Harry Potter and one of them is a Harry Potter fanatic.

(a) Derive the market demand curves for each individual and the market demand curve for Privet Drive.

(b) Suppose the market supply for Harry Potter books in Privet Drive is given by Qs =5 + P. Find the equilibrium price and quantity. How much does each consumer purchase at the equilibrium price?

Reference no: EM131095149

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