QUESTION FIVE The demand function for a product is linear and it is of the form p = a + bq where p = price and q = quantity. The values a and b are constants. When the price is Sh. 2, quantity demanded is 9 units. For every increase in price by Sh. 2, quantity demanded falls by 1 unit and vice versa. Required a) Determine the demand function and hence determine the price that leads to a demand of 4 units. b) What price results in zero demand? c) Determine the rate of change of price with unit with respect to quantity and interpret it.

QUESTION FIVE The demand function for a product is linear and it is of the form p = a + bq where p = price and q = quantity. The values a and b are constants. When the price is Sh. 2, quantity demanded is 9 units. For every increase in price by Sh. 2, quantity demanded falls by 1 unit and vice versa. Required a) Determine the demand function and hence determine the price that leads to a demand of 4 units. b) What price results in zero demand? c) Determine the rate of change of price with unit with respect to quantity and interpret it.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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