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Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity

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Added on  2021-07-05

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This article explains the concepts of Marginal Utility, Market Demand Curve, and Calculating Equilibrium Price and Quantity with solved examples. It also covers the concept of Elasticity of Demand and its application in real life. The article provides study material, solved assignments, essays, dissertations, and more at Desklib.

Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity

   Added on 2021-07-05

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MembersAmrina Rahman Mushfiq Ahmed PrantikKanij Fatema ChaityNoshin Rahman Ramisa Tasfiah
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_1
-George Bernard ShawTopics:Marginal UtilityMarket Demand CurveCalculating Equilibrium Price and Quantity
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_2
Consider the following table showing the utility of different numbers of days skied each year:Number of days skiedTotal utility ($)0017021103146417651966196Construct a table showing the marginal utility for each dayof skiing. Assuming that there are 1 million people with preferences shown in the table, draw the market demand curve for ski days. If lift tickets cost $40 per day, what are equilibrium price and quantity of days skied?
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_3
What is ??is the satisfaction received from consuming a good or serviceis the additional utility from the consumption of an additional unit of a commodityMarginal Utility = Change in Total Utility/ Change in UnitsTotal utility of a commodity increases adding the MU but at a decreasing rate.
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_4
Analyzing the given table00017070-0=702110110-70=403146146-110=364176176-146=305196196-176=206196196-196=0Fig: MU for each day of skiingFor example, Total Utility (Day 1) = 70 Total Utility (Day 2) = 110 So, 2ndday’s MU= 110-70=40➢Total utility is the of the marginal utility up to that point ➢Ordinal measures are needed instead of cardinal numbers
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_5
Market Demand Curve✓Demand of all consumers of a good or service at a given price✓Market demand curve is the at each price
Marginal Utility, Market Demand Curve, Calculating Equilibrium Price and Quantity_6

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