Question

a retailer has been selling 2800 tablet computers a week at $250 each. the marketing department estimates that an additional 80 tablets will sell each week for every $10 that the price is lowered. (a) find the demand function.

Answer 1

From the given information, The demand function is (P) = -x/8 + 600. The demand function illustrates the causal connection between the quantity of a commodity that is demanded and its numerous determinants.

The demand function is given by P - P1 = m(x-x1)

Since, m = -10/80    (i.e. additional 80 tablets every $10)

P1 = $250, x1 = 2800

So, P - 250 = -1/8 (x - 2800)

P = -1/8 + 350 +350

P = -x/8 + 600

Hence, the demand function (P) = -x/8 + 600

• One variable's connection with its determinants is described by the demand function. It explains how much of a certain amount of products is bought at various prices for that good and its related goods, various income levels, and various values for other demand-affecting variables.

There are two categories of demand function:

• The linear demand function
• Nonlinear Demand Function

Without needing to create a demand function graph, an algebraic formula for constructing demand curves is known as a linear demand function.

Demand function with nonlinearity. The slope of the demand curve (P/Q), in a nonlinear or curved demand function, varies along the demand curve.

Learn more about Demand function, here

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