Answer:
- The slope of the demand curve at point A is - $0.40/unit
- The slope of the demand curve at point B is - $0.14/unit
Explanation:
See the file attached with the figure corresponding to this question.
The slope of a curve at a given point is the slope of the line tangent to the curve at that point.
Point A:
The tangent line to the demand curve at point A is drawn and passes through the points (20, 34) and (45, 24).Then, the slope is:
- slope = rise / run = ΔP / Δq = $ (34 - 24) / (20 - 45) units
- slope = - $10 /25units = - $2/5units = - $0.40/unit.
The minus sign indicates the that price decreases when the quantity increases
Point B:
The tangent line to the demand curve at point B passes through the points (90, 12) and (140, 5).Then, the slope is:
- slope = rise / run = ΔP / Δq = $ (12 - 5) / (90 - 140) units
- slope = - $7 /50units = - $7/50units = - $0.14/unit.
Again, the negative sign indicates that when the number of units increase the price decreases.
