Question

There are two related variables Price (P) and Quantity Demanded (Qd). The relationship between the two is given by this formula: P=25-0.12Qd

1. Please create a table showing the different values for P and Qd starting at P=25 and going down by 5 unitds. Price is in dollars per item and Qd is in thousands of units.

2. create a graph with this information, the graph should be clearly labelled, have a good scale and at least three data points should be plotted. please note it is a convention in Economics to plot the price on the y-axis.

Answer 1

1, P = 25 - 0.12Qd.....(1)

We can write equation(1) as,

0.12Qd = 25 - P

Qd = (25 - P) / 0.12

Now, starting from P = 25 and going down by 5 units, we get the following values of Qd in the table. In case of decimal values of Qd, we take the nearest approximate value.

Price($)	Qd(Thousands)
25	0
20	41.7
15	83.3
10	125
5	166.7
0	208.3

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2. Plotting the values of P and Qd, we get the following graph,

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