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damaskus [11]
3 years ago
10

Sheila is hosting a large diplomatic event and needs to increase her inventory of dinnerware sets. She has set a $1925 budget an

d will choose dinnerware that will give her as much utility as possible. She shops online at Dinnerware Outlet and finds a deal for 30 sets of dinnerware on sale for $35 and she purchases them. A few days later, an email notifies her that another website called DinnerTime offers a deal for 35 sets of dinnerware for $25, while all other prices remain the same, and she snags them too. Given this information, plot Sheila's demand curve for plates and cups.
Business
1 answer:
svp [43]3 years ago
6 0

Answer:

Demand curve for Sheila's plates and cups

Q = 22.5 - \frac{1}{2}P

Explanation:

we have to write the demand function for Shiela's

Q = b - aP

we solve for a solving for the line that cross two points:

\frac{P_2-P_1}{Q_2-Q_1} = a

\frac{25 - 35}{35 - 30} = a

\frac{-10}{5} = a

- \frac{1}{2} = a

Then we solve for b:

35 = b - 1/2(25)

35 - 1/2(25) = b

b = 22.5

Last we build the demand curve

Q = 22.5 - \frac{1}{2}P

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