Gas Pump, South Dakota, there are two kinds of consumers, Buick owners and Dodge  owners. Every Buick owner has a demand function for gasoline DB(p)=20 − 5p for p ≤ 4and  DB(p) = 0 if p> 4. Every Dodge owner has a demand function DD(p)= 15 − 3p for p ≤ 5 and  DD(p) = 0 for p> 5. (Quantities are measured in gallons per week and price is measured in  dollars.) Suppose that Gas Pump has 150 consumers, 100 Buick owners, and 50 Dodge  owners. a. If the price is $3, what is the total amount demanded by each individual Buick Owner?  And by each individual Dodge owner? What is the total amount demanded by all  consumers in Gas Pump at a price of 3? b. Use ink to draw the demand curve representing the total demand by Buick owners on the  graph. Use ink to draw the demand curve representing total demand by Dodge owners.  Use ink to draw the market demand curve for the whole town. (make some labels) c. At what prices does the market demand curve have kinks? When the price of gasoline is  $1 per gallon, how much does weekly demand fall when price rises by10 cents? When  the price of gasoline is $4.50 per gallon, how much does weekly demand fall when price  rises by10 cents? When the price of gasoline is $10 per gallon, how much does weekly  demand fall when price rises by10 cents?

ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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In Gas Pump, South Dakota, there are two kinds of consumers, Buick owners and Dodge 
owners. Every Buick owner has a demand function for gasoline DB(p)=20 − 5p for p ≤ 4and 
DB(p) = 0 if p> 4. Every Dodge owner has a demand function DD(p)= 15 − 3p for p ≤ 5 and 
DD(p) = 0 for p> 5. (Quantities are measured in gallons per week and price is measured in 
dollars.) Suppose that Gas Pump has 150 consumers, 100 Buick owners, and 50 Dodge 
owners.
a. If the price is $3, what is the total amount demanded by each individual Buick Owner? 
And by each individual Dodge owner? What is the total amount demanded by all 
consumers in Gas Pump at a price of 3?
b. Use ink to draw the demand curve representing the total demand by Buick owners on the 
graph. Use ink to draw the demand curve representing total demand by Dodge owners. 
Use ink to draw the market demand curve for the whole town. (make some labels)
c. At what prices does the market demand curve have kinks? When the price of gasoline is 
$1 per gallon, how much does weekly demand fall when price rises by10 cents? When 
the price of gasoline is $4.50 per gallon, how much does weekly demand fall when price 
rises by10 cents? When the price of gasoline is $10 per gallon, how much does weekly 
demand fall when price rises by10 cents? 

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