Question

For a certain product, Maximum Reservation Price is $26 and Maximum Willingness to Buy is 10,381 units. Calculate slope for the linear demand curve describing demand for this product. Remember, slope will always be NEGATIVE. Rounding: 2 decimal places.

SHOWING HOW YOU GOT THE ANSWER WILL HELP THE MOST. MARKETING METRICS IS THE SUBJECT OF THE QUESTION.

Answer 1

The linear demand curve is defined as:

Q = a + b*P where b is the slope of demand curve (dQ/dP = b)

Maximum Willingness to Buy is 10,381 units which means when P = 0, then Q = 10381. We can substitute these values to find the value of b in terms of a-

10381 = a + b*0
a = 10381

The Maximum Reservation Price is $26, which means this is the price at which no quantity is purchased.

0 = a + b*26 and we know that a = 10381

10381 + b*26 = 0
b = -10381/26
b = -399.27 which is also the slope of demand curve.