Given that quantity demanded per period of time is a function of price and that the relation is expressed as: Q = 60 - 1/3 P, where Q is quantity demanded and P is the price, (a) Find the quantity demanded when price is : (i) N30.00; (ii) N210.00; (iii) NO.00. (b) comment on (a) (ii) above. (c) suppose the relation is now expressed as P = N (180 - 3Q); find P when: (i) Q = 0; (ii) Q = 60; (iii) Q = 59.
Explanation
(a)Q=60-1/3P (i) When price is N30, Q = 60 - \(\frac{1}{3}\) (30) = 60 - 10 , Q = 50 (ii) When price is N210, Q = 60 - \(\frac{1}{3}\)(210) = 60 - 70 = - 10 (iii) When price is N0, Q = 60 -\(\frac{1}{3}\)(0) 3 = 60 -0 = 60 (b) In (a) (ii) above, the law of demand comes into play here. The law of demand states that, " the higher the price, the lower the quantity demanded". The fact that the price is as high as N210, consumers are not willing to buy more. (c)(i) P = N (180 - 3Q) when Q= 0 p = N (180 - 3(0) = N180 - 0 =N180 (ii) when Q = 60 p= N (180 - 3 (60) = N (180 - 180) =N0 (iii) when Q = 59 P = N (180 - 3(59) = N (180 - 177) = N3.
