Consumer C Demand Quantity Calculate the slope of the demand curve for Consumer

Question

Consumer C Demand Quantity Calculate the slope of the demand curve for Consumer C. Do not write out an equation, just write the value to the first decimal. 8. Calculate the reciprocal of the slope of the demand curve for Consumer C. Do not write out an equation, just write the value up to the first decimal. 9. 10. Interpret the value of the reciprocal you calculated in the previous question for Consumer C. Keep in mind that the value reflects changes in the vertical axis (using the appropriate units) and changes in the horizontal axis (using the appropriate units).

Explanation / Answer

Slope is defined as change in variable on y axis dived by change in variable on x axis.

In this slope it means change in price divided by change in quantity demanded.

8.

Slope = change in price/ change in quantity demanded

Slope =(10-5)/(6-8)

Slope =-5/2

Slope =-2.5

Since it is a straight line the slope remains same on all points.

9. Reciprocal of the slope

= -1/2.5

= -0.4

10. Demand curve is drawn using the inverse demand equation (P=a/b-1/bQ) and the Demand Equation is (Q= a-bP)

Where b= -0.4

1/b= -2.5

The value for reciprocal (b) represents the change in quantity demanded by one unit change in price. It refers to the law of demand. The reciprocal of the slope is the slope for the demand equation.

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