Business > STUDY GUIDE > Mission San Jose HighECONOMICSECONOMICS MISC1.1.5 Linear Demand and Supply Functions ANSWER KEY. - p (All)

Mission San Jose HighECONOMICSECONOMICS MISC1.1.5 Linear Demand and Supply Functions ANSWER KEY. - practice activities 1.1 Markets Demand and Supply Linear Demand and Supply functions

Document Content and Description Below

1.1 Markets, Demand and Supply Linear Demand and Supply functions Introduction: The following activity is designed to accompany the HL sections of the textbook Pearson Baccalaureate’s Economics f ... or the IB Diploma Chapters 2 and 3 sections 2.4, 2.7 and 3.2 and 3.4 Part 1 Linear Demand Equations: a. Assume the demand for ski poles in a small town is represented in the table below: Price (dollars) Quantity Demanded 0 200 4 180 8 160 12 140 16 120 20 100 24 80 28 60 32 40 36 20 40 0 b. Using the information in the demand schedule above, derive the demand function for ski poles, expressed as Qd=a-bP, where: i. Qd is the quantity demanded ii. ‘a’ is the quantity intercept, or the amount that is demanded at a price of zero iii. ‘b’ is the price coefficient of demand, or the change in quantity demanded resulting from a $1 change in price iv. ‘P’ is the price of ski poles. Qd = a-bP the ‘b’ variable = ΔQ ΔP . Choose any combination of price and quantity to find ‘b’.practice activities (Q2-Q1)/(P2-P1) = (160-180)/(8-4) = -20/4 = -5 Qd = a-5P. Now insert a price and quantity from t [Show More]

Last updated: 3 years ago

Preview 1 out of 20 pages

Buy Now

Instant download

We Accept: