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If a demand is 5000 units when price is 400 and 6000 when the price is 380 what will be demand equation?
I am getting A =300 whereas answer is 500-0.2q in revesion kit, I have taken b as -0.02, IS it the reason?I think I have to ignore the minus sign to get the correct answerYes – you should have ignored the minus.
However, think about it – you should have realised that your answer could not possibly have been correct. As you know from the formula sheet, A is the price for which the demand is zero. Given that at a price of 400 the demand is 5,000 then A has to be more than 400 for the demand to be zero!!
I do suggest that you watch my free lectures on this – I go through examples of how to calculate B and A.
The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.thankyou very much for quick response,I figured it out but just wanted to confirm.
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