Find the slope of an assumed linear demand curve for garri, when Mr. Anthony purchase 1000 quantities at N200 per plastic and 500 quantities at N350 per plastic?

The linear demand curve is of the form

Q = a - bP

where

Q = quantity

P = price

b = the slope, the rate of change of price with respect to demand

a = the intercept (when the price is zero).

When Q = 1000, P = N200, therefore

a - 200b = 1000 (1)

When Q = 500, P = N350. Therefore

a - 350b = 500 (2)

Subtract (2) from (1).

150b = 500

b = 3.333

The slope is usually negative but it is expressed as ΔP/ΔQ, that is

(Absolute change in price) / (absolute change in quantity).

Answer: 3.33