Question

The following are the equations for the supply and demand curves in the market for weezils: Demand: Qd = 20 - 2P Supply: Qs = 5 + 3P where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. If consumers decide that they want 20 percent fewer weezils at every price, the equation for the new demand curve for weezils will be __________.Qd = 20 - 1.6P Qd = 0.2(20 - 2P) Qd = 0.8(20 - 2P) Qd = 80(20 - 2P)

Answer 1

How are quantity demanded (QD) and price related?

Answer 2

If the consumers decide that they want 20 percent fewer weezils at every price, the equation for the new demand curve for weezils will be Qd = 20-0.16P. (Option 1)

Explanation:

We can state the new demand equation Qd' in term of the new price P' as follows:

Qd'=20-2P'

Then the new price will be 20 lesser than the old price:

P'=(100%-20%)P

P'=0.8*P

Replacing P' in Qs':

Qd'=20-2(0.8P)

Qd'=20-1.6P