Question

Ralph has a demand curve for office visits (Qd) to the doctor in a year given by Qd = 20 – (P/10) where P is the price of an office visit for Ralph.

How many doctor visits would Ralph make if they cost $50? What price would result in Ralph seeing the doctor 10 times in a year?

Answer 1

Given that,

Qd = Office visits to the doctor per year

P = price of 1 office visit to the doctor

Now, if P = $50,

Then Qd = 20 - (P/10)

= 20 - (50/10)

= 15

So, Ralph will make 15 visits per year if the price for each visit is $50.

Next , we know Ralph has made 10 visits to the doctor per year. So, Qd = 10

Let's calculate P, the price of each visit to doctor.

Taking the same equation, Qd = 20 - (P/10)

10 = 20 - (P/10)

- 10 = -P/10

P = 100

So each visit costs him $100

Therefore total price paid by Ralph for 10 visit = 10 * 100 = $1,000.