Case We illustrate how to combine individual demand curves to get a total demand curve….
Case
We illustrate how to combine individual demand curves to get a total demand curve graphically using estimated demand curves of broadband (high-speed) Internet service (Duffy-Deno, 2003). The figure shows the demand curve for small firms (1–19 employees), the demand curve for larger firms, and the total demand curve for all firms, which is the horizontal sum of the other two demand curves.
At the current average rate of 40¢ per kilobyte per second (Kbps), the quantity demanded by small firms is Qs = 10 (in millions of Kbps) and the quantity demanded by larger firms is Ql = 11.5. Thus, the total quantity demanded at that price is Q = Qs + Ql = 10 + 11.5 = 21.5.
Case We illustrate how to combine individual demand curves to get a total demand curve…