ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the independent individual consumer demand curves for a commodity are horizontally summed, the result is the market demand curve for the commodity.

Detailed explanation-2: -The horizontal summation of all individuals demand curve is known as market demand curve. Market demand curve indicates different quantities of a commodity that all buyers in the market are ready to buy at different possible prices of the commodity at a point of time.

Detailed explanation-3: -Answer and Explanation: A horizontal demand curve represents demand that is perfectly elastic. That is, consumers will only purchase the good at a given price, and will purchase zero when the price is above the given price.

Detailed explanation-4: -The given statement is False. Individual demand is the demand of one person for a good at a given price. Market demand is the sum of demand of all the consumers in the market at a particular price. Thus, the market demand curve is the horizontal summation of the individual demand curves, not the vertical.

Detailed explanation-5: -Individual demand gives the quantity purchased for each price. Analogously, the market demand. gives the quantity purchased by all the market participants-the sum of the individual demands-for each price. This is sometimes called a “horizontal sum” because the summation is over the quantities for each price.