Answer: Therefore the demand function can be given as;
q = -3/2p + 1590
Step-by-step explanation:
Given that at;
$900 the monthly demand is 240. ....1
$850 the monthly demand is 315. ....2
Since, the function is a linear function. The demand function would be of the form;
q = mp + c ....5
Where q = quantity demanded
p = price m = slope and c = intercept
Substituting conditions 1 and 2 to the equation.
240 = 900m + c. ...3
315 = 850m+ c ...4
Subtracting eqn 4 from 3
-75 = 50m
m = -75/50
m = -3/2
Substituting m = -3/2 into equation 3;
We have,
240= -3/2(900) + c
c = 240 + 3/2(900)
c = 1590
Therefore the demand function can be given as; substituting m and c into equation 5, we have;
q = -3/2p + 1590
