Question

an economist modeled the demand q for a certain product as a linear function of the selling price p. the demand was 20,000 units when the selling price was $40 per unit, and the demand was 15,000 units when the selling price was $60 per unit. based on the model, what is the demand, in units, when the selling price is $55 per unit?

Answer 1

This is a linear function which means that it takes the form of y = MX + c.

An economist is an expert and practitioner in the social technological know-how discipline of economics. The man or woman may additionally look at, develop, and follow theories and concepts from economics and write about monetary coverage.

Y is the demand

X is the price

Find m.

= (Y₂ - Y₁) / (X₂ - X₁)

= (15,000 - 20,000) / (60 - 40)

= -250

Find c using substitution;

20,000 = -250 * 40 + c

20,000 = -10,000 + c

c = 20,000 + 10,000

c = 30,000

A linear function is;

y = -250x + 30,000

If the selling price is $55;

y = -250 * 55 + 30,000

y = 16,250 units.

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