Answer:
$16
Explanation:
At $0, demand is 100units.
but for every $2 increase, there is a 5 unit decrease.
When the demand is fixed at 60 units, let price of good J be x
Firstly, we calculate the difference between 100 units and 60 units
we have, 100 - 60 = 40 units
For every $2, increase, demand is minus 5.
thus we calculate how many 5 units there are in 40 units.
we have 40 units ÷ 5 units = 8
SInce every +$2 causes -5 units, we have the price of good J at 60 units fixed demand to be 8 x $2 = $16.
It means at $16, the demand of good J is 60 units.
Alternatively, you could do this,
At $0, demand is 100 units
At $2 (0 + 2), demand is 95 units (100-5)
At $4 (2+2), demand is 90 units (95-5)
At $6 (4 + 2), demand is 85 units (90-5)
At $8 (6 +2), demand is 80 units (85-5)
At $10 (8 + 2), demand is 75 units (80-5)
At $12 (10 + 2), demand is 70 units (75-5)
At $14 (12 + 2), demand is 65 units (70-5)
At $16 (14+ 2), demand is 60 units (65-5)
Cheers.
