26/08/15
Lesson 3: HL Linear Demand Functions
Learning Objective: Using the demand function, I can produce a demand schedule then plot a demand curve.
The demand function shows the relationship between market demand for a product and the price of the product.
Example: Qd=500-10P
First let's produce a demand schedule:
The demand function shows the relationship between market demand for a product and the price of the product.
- Qd=a-bP
- Qd=quantity demanded, a=quantity demanded if price was zero, b=slope
Example: Qd=500-10P
First let's produce a demand schedule:
If the value of 'a' was 600 then the demand curve would start at a new place on the x-axis. |
Now let's see what happens when 'b' or the slope, is changed to 20. This results in a decrease of demand by 200 units with the increase of $10.
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HW/Classwork: Don't forget to use a ruler!