A linear demand curve passes through the points (price 5, quantity 200) and (price 15, quantity 150). What quantity is demanded at a price of 25?
Answer and explanation
Correct answer: D. 100
- Step 1: Slope = (150 - 200)/(15 - 5) = -5. Step 2. Quantity at price 25 = 200 + -5 x (25 - 5) = 100. Answer: 100. Why not the others: 140: That assumes quantity falls by one unit for each unit rise in price. 145: That moves along the line by one unit of price only. 175: That is the average of the two quantities.
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