Suppose there are 2,000 potential consumers in the Chestnut Hill market for tablet computers. All consumers have identical preferences over tablets (T) and expenditures on other consumption goods (X), represented by the following utility function: U(T, X) = 500T(1 – T) + a) Find the total market demand for T (call it TM) as a function of the price of a tablet (pT ). b) Write down the equation for the market demand curve (with TM on the horizontal axis and pT on the vertical axis).

Suppose there are 2,000 potential consumers in the Chestnut Hill market for tablet computers. All consumers have identical preferences over tablets (T) and expenditures on other consumption goods (X), represented by the following utility function: U(T, X) = 500T(1 – T) + a) Find the total market demand for T (call it TM) as a function of the price of a tablet (pT ). b) Write down the equation for the market demand curve (with TM on the horizontal axis and pT on the vertical axis).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.1P

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