Introduction to how to write the equation of demand
The demand equation shows a negative relationship between price and quantity of goods demanded while other factors constant. When the price goes up and the quantity demanded falls when the price drops the quantity demanded increases. The demand equation expresses the demand or exact function q (quantity demanded) as a function of p unit price (price per unit).
Market equilibrium quantity and price is where exactly equal to supply.
Simple accurate equation-
For Example; q = 5000-20 p
Here is a constant factor in the 5000, and is negatively related to price, depicts the 20 P. it shows if the prices prevailing in a 100 unit, then q = 5000-20 (100) is q = 5000-2000 i.e. q = 3000 block. Therefore, the prices of 100 per unit, will buy 3000 units of the item.
Writing equations of demand factors affecting demand-
Product prices:
Prices have a negative view towards the demand of the product. When prices rise, demand falls and vice versa.
2. the income of the person:
Income is directly linked to the exact. When income increases, the demand for the product also rises in General.
3. prices for replacement:
When prices of some substitute good height then the exact for its substitutes also increase, making it more desirable to consumers. For example, when prices of coke and then grow demand for Pepsi also increases.
4. prices for free goods:
When prices free well increases the demand for his then compliments also falling, making it less desirable to consumers. For example, when gasoline prices rise when demand for cars falls.
5. the taste and preferences of consumers:
The taste and preferences of consumers are constantly changing. The product was in demand today may not be accurate tomorrow.
Simplified form of linear demand function is,
q = mp + b
Where,
q-exact
p-Price
Wrting a detailed exact equation-
For Example; q = 5000-20 p + 10Y + 5ps-50pcs + 15t-20T
Here, -20 P = negative relationship with prices
+ 10U = positive relationship with income
5ps + = positive relationship with increased prices for substitutes
-= negative relation with 50pc increase in the price of compliments
+ 20T = good taste and preferences
-15T = adverse taste and preferences
Examples of the exact equation
Example: 1
Annual sales of mobile store have the following expression.
q = p + -30 7000
If you take $ 100 per item, then find waiting to sell.
Solution:
Given:
q = p + -30 7000
p = 100
Step 1:
The General form of a linear demand function is as follows.
q = mp + b
Step 2:
q = -30 (100) + 7000
= -3000 + 7000
= 4000
Answer: the linear demand Functions = 4000
Example: 2
Annual sales of store bags have the following expression.
q = p + -40 8000
If you charge $ 50 per item, then find waiting to sell.
Solution:
Given:
q = p + -40 8000
p = 50
Step 1:
The General form of a linear demand function is as follows.
q = mp + b
Step 2:
q = -40 (50) + 8000
= -200 + 8000
= 7800
Answer: the linear demand Functions = 7800
The problem to the exact equation
Problem 1:
Annual sales of store bags have the following expression.
q = p + -20 5000
If you charge $ 20 per item, then find waiting to sell.
Answer: 4600
Problem 2:
Annual sales of mobile store have the following expression.
-10 p + q = 6000
If you charge $ 30 per item, then find waiting to sell.
Answer: 5700
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