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Add demand mark

hey everyone in this video I'm going to be discussing how to horizontally smade to individual curves in order to find one market demand curve all up I'm going to be doing two videos on this topic the first video which is this one is going to be the construction of the diagram so showing the market demand curve itself the second is going to be about working out the algebraic representation of that diagram that we're going to draw today so let's get started on video 1 in my example I have two hypothetical individuals mark and Ben whose demand curves are represented by the equations P is equal to 10 minus 5 Q and P is equal to 5 minus Q respectively in my example the market itself consists of just Mark and Ben so I'll put here market is market plus Ben I'm going to break up the task into three steps in the first step I'm just going to draw out each individual demand curve next to each other making sure that I have the vertical and horizontal axes intercept labeled so if you want to skip this part then that's fine here is the time to skip to in order just to go straight to step 2 okay good if you're still with me I'm going to draw the two axes next to each other just like this and I'll actually draw one more which is going to be my market demand curve axes which I'll look at later since our demand equations are expressed with P isolated on the left hand side we can take the constant terms here as our vertical axes intercepts so I'll just write down some markers for mark and that's 10 if this is all crazy for you and if you're unsure about how to draw a demand curves from algebraic equations I'm not going to go through this very slowly here but I'll put a link to a separate video that shows this skill in more more depth ok good and Ben's vertical axis intercept is 5 here ok good so we have our vertical axis intercepts to find our quantity axes intercepts we just substitute P is equal to 0 into both equations so for mark if we do this we get 0 is equal to 10 minus iq adding 5q to both sides we find 5q is equal to 10 dividing both sides by 5 we get Q is equal to 2 so that's good for Ben we do the same thing so if P is equal to 0 then 0 is equal to 5 minus Q adding Q to both sides we get Q is equal to 5 and there we have it so if we draw a line between these intercepts for both individuals we get our downward sloping demand curves for for each of these individuals and that's step one finished so that's good the second step is just to construct our quantity axis intercept and I do it like this because I think this is an easy step to take now as we just saw the quantity axis intercept from mark is 2 and for Ben it is 5 now let's just think about what our demand curves are doing here they're giving us the relationship between the price of a good and the amount that is demanded for each individual at each one of those prices so the quantity axis intercepts can be interpreted as telling us how much each individual would demand if the price was zero so if the price was zero mark is demanding two units and Ben is demanding five but remember that market consists only of mark and Ben so it follows from this that in the market if the price is zero then the amount demanded in the market would be seven that is two units from Mark's demand and five units from Ben I hope that that's clear what we're doing if the logic is clear you can start to see why it's called horizontal summation here we are summing up the quantities that each individually is demanding the quantity is the horizontal variable and the trick is we're just going to look at that horizontal summation for a range of prices or the prices that are relevant and so in step three now that we have the horizontal sum for price is equal to zero we're going to continue to do this for the other important prices the super easy way to do this is to just take notice of the vertical axis intercepts for each individual and horizontally sum at those points okay so let's mark those prices on the market diagram these are going to be our two special prices okay so we're going to start with some 18 at that lower price first and I find it's really useful to draw a line across at that point so I price five we know that been demand zero we can see that quite clearly here but extending our line across we see that mark demands some positive amount and if we draw our line down it looks like he demands about one at this price so to find out for sure we're going to substitute P is equal to 5 into mark's demand curve that's going to tell us how much mark is demanding at price is equal to 5 if we do that we find 5 is equal to 10 minus 5 Q if we take away 10 from both sides we get negative 5 is equal to negative 5 Q and dividing both sides by negative 5 we find that Q is equal to 1 so price is equal to 5 Mac demands one unit and as we said before at price x5 Ben demands zero units so in the market which is just mark plus Ben we get one unit in total being demanded at P is equal to 5 so we have this point now here which we can place on our market demand curve I hope that makes sense for you guys ok good so let's just do this last price this last important price is equal to 10 and I hope that you will be able to gauge here is that for the prices above 5 and below 10 Mac is definitely demanding some quantity some positive quantity but Ben will not at 10 mark is demanding 0 this is the highest price in which his demand curve extends to and so in the market the highest price that the demand curve will extend to is 10 as well and further since the market demand curve is the horizontal sum of the two individual demand curves we can deduce that the market demand curve for prices above 5 below 10 is going to look exactly like Marx individual curve for prices above 5 below 10 because Ben isn't doing anything within these prices so we join these points together and we get the correct shape for our top half and once we connect the middle point without Q axes intercepts that we found in that second step we give ourselves they get big clap here because that's it that's our demand curve okay good so that's our market demand curve I hope you can see here that really the determinant of the kink is going to be the vertical axis intercept if we had two individuals who stopped remaining at the same price we wouldn't get the kink that we can see here in our market demand curve here I hope that's all clear I hope that the video helped the only thing left is to represent this diagram algebraically that is to do any math and I'm going to do that in a second video in the meantime I hope that you liked the video and you enjoyed it please have a look at my channel please like and subscribe I hope that you're studying economics I hope you keep added have a great day or night