Question

Find the slope of an assumed linear demand curve for garri, when Mr. Anthony purchase 1000 quantities at N200 per plastic and 500 quantities at N350 per plastic?

Answer 1

The linear demand curve is of the form
Q = a - bP
where
Q = quantity
P = price
b = the slope, the rate of change of price with respect to demand
a= the intercept (when the price is zero).

When Q = 1000, P = N200, therefore
a - 200b = 1000 (1)
When Q = 500, P = N350. Therefore
a - 350b = 500 (2)

Subtract (2) from (1).
150b = 500
b = 3.333

The slope is usually negative but it is expressed as ΔP/ΔQ, that is
(Absolute change in price) / (absolute change in quantity).

Answer: 3.33