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Sunday, September 14, 2008

The Demand Set

q = quantity demanded
p = price

Demand Set D (in plain English) = It's the relationship between the price of an item to its demand, so if you look at the curve here, at p5 (price 5), the demand is 10, at p1, the demand is approximately 55. (q,p)

Demand Function = As p (price) changes, the q (Quantity demanded) changes as shown in the chart to the left. It is expressed mathematically as qD.

So the formula would be written as qDp

So for example, let's look at this problem:

6q+8p=125

Let's get q by itself (remember Algebra guys)

6q+8p=125
-8p -8p

Then we get:
6q = 125-8p

Then, let's divide each side by "6"
6q/6 = 125-8p/6

We finally get:

q = 125 - 8p/6
or
qDp = 125 - 8p/6

Remember p = price, and just use the substition formula if p = 4
qD(4) = (125 - 8X4)/6
(125-32)/6
93/6

therefore
qDp = 93/6


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