Answer to Question #70356 in Microeconomics for Ryan

Question

Ben has individual demand curve P = 8 - Q, while Ana has individual demand curve P = 8 - 0.5Q. If they are the only two in the market, find the market demand curve as P = A - BQ.

What is A?
What is B?

Answer 1

Explicit costs are:
$6,000+$2,000+$1,500+$500=$10,000
Implicit costs are:
$15,000+0.1*($6,000+$2,000+$500) = $15,850
Total economic costs:
$10,000+$15,850=$25,850