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Sir, I have a problem with sending questions, although I don’t type a huge text, so sorry if it will appear again.
My question is about Demand curve formula. Please read the extract:
Market research has indicated that there is a linear relationship between products selling price and number of units of the form P=a-bx At a selling price of $100 demand is expected to be 1000 units per week. For every $10 increase in selling price, demand will reduce by 200 units and for every $10 decrease in selling price weekly demand will increase by 200 units.Why in the answer a=$100 + (1000/200 * $10)?
We can’t write it simply as $100?Because a is the maximum selling price (at which the demand till be zero).
If a is only 100, the the demand will be 1,000, so for a demand of zero then a will have to be higher.
Have you watched my free lectures on this?
Thank you very much. I haven’t watched the new ones. As for old lectures, I have watched at least twice, but I have a problem to confuse things…
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