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Compute the slope of linear demand function.

I believe the linear demand function is,

Qd = a - bP, where -b is the slope.

Is the required slope, -b = (Qd - a)/P?

krishnakrishna asked 2 years ago

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Answers

2

Yes, Krishna, -b = (Qd - a)/P is the slope. I've computed it below using the graph.

The function of linear demand function is,

Qd = a - bP where Qd is the quantity demanded, a, b > 0, and P is the price.

-b is the slope. The negative represents if the price increases then quantity demand decreases.

To compute slope,
(P1, Q1dQ_1^d) is point of departure
.(P2, Q2dQ_2^d) is point of arrival.

Slope = Q2dQ1dP2P1\frac{Q_2^d \, - \, Q_1^d}{P_2 \, - \, P_1} = +veve\frac{+ve}{-ve} = negative result

where, P1 > P2

graph of linear demand function

ramesrames answered 2 years ago

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