Question

Quantity demanded is 200 units when the unit price is set at $90. The quantity demanded is 1200 units when the unit price is $40. Find the demand equation

Answer 1

`Q_n=(2000)-(20)P_n`

Explanation:

From the question we are told that:

Initial Quantity demanded Q_1= 200 units

Initial demand price
`P_1=\$90`

Final Quantity demanded
`Q_2= 1200 units`

Final demand price
`P_2=\$40`

Generally the Demand Equation is mathematically given by

`Q_n=a-bP_n`

Where

a=Other factors affecting price

b=Slope of the demand curve

Therefore

`Q_1=a-bP_1`

`200=a-b(90)`

`Q_2=a-bP_2`

`1200=a-b(40)`

Comparing both above equations

`a=2000`

`b=20`

Therefore the Demand Equation is mathematically given by

`Q_n=(2000)-(20)P_n`