Suppose the total demand function for a good was made up of

Suppose the total demand function for a good was made up of 10 identical, individual demanders all with a demand function given by: qD-20-0.5P. Find the inverse, total demand function and fill in the missing values below. P-40-2.00 (Round to the nearest two decimal places if necessary.)

Solution

Total number of individuals(n) = 10

demand function of each individual is

q = 20 - 0.5P

so total demand would be sum of all individuals demand

Q = nq

Q = 10(20 - 0.5P)

= 200 - 5P

Q = 200 - 5P

so inverse total demand function is

Q = 200 - 5P

5P = 200 - Q

P = 40 - 0.2P