Question

The quantity demanded x for a certain brand of MP3 players is 100 units when the unit price p is set at $80. The quantity demanded is 1100 units when the unit price is $40. Find the demand equation.

p =

Answer 1

Answer:p = (2100 - x)/25

Explanation:

According to the law of demand, when the price,p of the brand of MP3 players is is high, the quantity,x of the brand of MP3 players demanded would be low and when the price,p of the brand of MP3 players is is low, the quantity,x of the brand of MP3 players demanded would be high.

To derive the demand equation, we would apply the slope intercept form of equation which is expressed as

y = mx + c

Where

m = slope

c = intercept

The slope, m would be

(y2 - y1)/(x2 - x1)

Slope = (1100 - 100)/(40 - 80) = 1000/-40

Slope = - 25

To find the y intercept, we would substitute m = - 25, y = 1100 and x = 40 into y = mx + c. It becomes

1100 = - 25 × 40 + c

1100 = - 1000 + c

c = 1100 + 1000 = 2100

y = - 25x + 2100

Therefore, the demand equation is

x = - 25p + 2100

25p = 2100 - x

p = (2100 - x)/25