Asked by Benoit BOUDA on Apr 29, 2024

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For ________ goods, market demand is the horizontal summation of individual demand curves and for ________ goods, market demand is the vertical summation of individual demand curves.

A) private; public
B) public; private
C) nonrival; rival
D) nonexcludable; excludable

Horizontal Summation

A method used in economics to describe the total demand or supply in a market by adding together individual demands or supplies at the same price level across different entities.

Vertical Summation

A method used in economics to aggregate individual demand curves to find total market demand for a good.

Private Good

A product or service that is excludable and rival in consumption, meaning its use by one individual prevents its use by another.

  • Describe how the market demand for public and private goods is derived.
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EO
Eniola OlowookereMay 01, 2024
Final Answer :
A
Explanation :
For private goods, market demand is the horizontal summation of individual demand curves because each unit of the good can only be consumed by one person at a time, leading to a direct addition of quantities demanded at each price level. For public goods, market demand is the vertical summation of individual demand curves because these goods can be consumed by multiple people simultaneously without reducing the amount available to others, thus the willingness to pay at each quantity is added together.