Demand and Supply

Demand and Supply

Question 1

P ($) Q

5 122

8 82

Demand and price have an inverse relationship as there is an increase in price quantity demanded for the product will fall. This negative relationship is shown by the downward sloping demand curve, which is illustrated in the graph below (www.investopedia.com). The linear equation can be used to calculate the slope of the line. Which is change in Y/ change in X. therefore for the following demand curve slope would be= 5-8/122-82, which is = -0.075. This tends to indicate that an increase in price of $1 will result in decrease in quantity ...