Demand Analysis: Estimating Surpluses and Functions

This lecture focuses on the demand analysis for photovoltaic (PV) panels by two families, the Jones and Smith families. The instructor presents a scenario where both families are interested in purchasing PV panels, emphasizing that their purchasing intentions are influenced by the price of the panels. The lecture includes calculations of total demand based on individual demands, which are derived from the families' willingness to pay at various price points. The instructor explains how to estimate the surpluses for each family when the price is set at seven. The demand functions for both families are established, with the Jones family having a demand function of Q = 10 - P and the Smith family having Q = 16 - 2P. The lecture also covers the graphical representation of these demand curves and the calculation of consumer surplus as the area of triangles formed between the demand curves and the price line. This analysis provides insights into consumer behavior and market dynamics.