Question

The demand for coffee is given by the following equation, where QD stands for the quantity demanded and P stands for price.

QD= 100− 4P =

The supply of coffee is given by the following equation, where QS stands for the quantity supplied and P stands for price.

QS= -10+ 2P

For parts a-d, consider a graph of the demand and supply curves with price on the vertical axis and quantity on the horizontal axis.

What is the slope of demand?
Slope =

At what price is quantity demanded equal to zero (this is, graphically, the vertical intercept of Demand)?
P =

What is the slope of supply?
Slope =

At what price is quantity supplied equal to zero (this is, graphically, the vertical intercept of Supply)?
P =

Answer 1

Using linear function concepts, it is found that the slopes and intercepts of the functions are given as follows:

a) -4.

b) P = 25.

c) 2.

d) P = 5.

What is a linear function?

A linear function is modeled by: y = mx + b

m is the slope, which is the rate of change, that is, by how much y changes when x changes by 1.

b is the y-intercept, which is the value of y when x = 0, and can also be interpreted as the initial value of the function.

The demand is given by:

D = 100 - 4P.

Hence the slope is -4. The demand is equals to zero when:

100 - 4P = 0 -> P = 25.

The supply is given by:

QS = -10 + 2P.

Hence the slope is 2. The supply is equal to zero when:

-10 + 2P = 0 -> P = 5.

Learned about linear function at

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