Author Question: Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the total ... (Read 27 times)

AEWBW

  • Hero Member
  • *****
  • Posts: 579
Suppose the demand for a particular product can be expressed as Q = 100/p. Calculate the total amount spent on this good when p = 10, 20, and 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in this market?
 
  What will be an ideal response?

Question 2

Suppose the market demand curve for pizza can be expressed as QD = 100 - 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of a pizza, and Pb is the price of a burrito. What is the slope of this demand function, and what information does the slope provide?
 
  What will be an ideal response?


coreycathey

  • Sr. Member
  • ****
  • Posts: 333
Answer to Question 1

In all cases, total expenditure equals 100 (since p  Q = 100). In general, a nonlinear demand curve of the form Q = A/p means that consumers wish to spend a total of A on this good regardless of its price.

Answer to Question 2

The slope is -2. The slope tells us how a change in the price of pizzas affects the quantity of pizzas demanded. An increase in the price of pizzas by 1 will result in a decrease of the quantity demanded by 2 pizzas.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

The Food and Drug Administration has approved Risperdal, an adult antipsychotic drug, for the symptomatic treatment of irritability in children and adolescents with autism. The approval is the first for the use of a drug to treat behaviors associated with autism in children. These behaviors are included under the general heading of irritability and include aggression, deliberate self-injury, and temper tantrums.

Did you know?

There are more bacteria in your mouth than there are people in the world.

For a complete list of videos, visit our video library