Answer to Question #210033 in Microeconomics for Vickie

Question

Suppose that there are 20 people are interested in buying good x who had a reservation price of 100 shillings and the 15th person had a reservation price of 50 shillings what will the demand curve look like

Answer 1

If there are 20 people are interested in buying good x who had a reservation price of 100 shillings and the 15th person had a reservation price of 50 shillings, then the demand function is:

$(Q - 20)/(15 - 20) = (P - 100)/(50 - 100),$

$Q - 20 = 0.1P - 10,$

Qd = 0.1P + 10.