1. 1 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Demand Function P =100 - 0.5Q u Label the horizontal and vertical axis u Calculate the demand schedule from the equation given above, for positive values of P and Q u Plot the points u Draw the graph u Label the graph

2. 2 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Q P = 100 - 0.5Q 0P = 100 -0.5(0) = 100 40P = 100 -0.5(40) = 80 80P = 100 -0.5(80) = 60 120P = 100 -0.5(120) = 40 160P = 100 -0.5(160) = 20 200P = 100 -0.5(200) = 0 Intercept (vertical) = 100: Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Calculate the demand schedule (Method A) P on the vertical (y) axis Q on the horizontal (x) axis

3. 3 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule P =100 - 0.5Q QuantityQ Price P 0 20 40 60 80 100 120 0 4080 120160200

4. 4 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule P =100 - 0.5Q QuantityQ Price P 0 20 40 60 80 100 120 0 4080 120160200

5. 5 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule 120160200 P =100 - 0.5Q QuantityQ Price P 0 20 40 60 80 100 120 0 4080

6. 6 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule P =100 - 0.5Q QuantityQ Price P 0 20 40 60 80 100 120 0 4080 120160200

7. 7 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule P =100 - 0.5Q Quantity Q Price P 0 20 40 60 80 100 120 0 4080 120160200

8. 8 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule P =100 - 0.5Q QuantityQ Price P 0 20 40 60 80 100 120 0 4080 120160200240

9. 9 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Plot the demand schedule Quantity P =100 - 0.5Q Q Price P 0 20 40 60 80 100 120 0 4080 120160200240

10. 10 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Join the points and label the graph P =100 - 0.5Q QuantityQ Price P : Demand P = 100 - 0.5Q D 0 20 40 60 80 100 120 0 4080 120160200240 Figure 2.17

11. 11 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Alternatively, plot the vertical intercept (Method B) Q Quantity Price P 0 20 40 60 80 100 120 4080 120160200240 Vertical intercept = 100

12. 12 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : and plot the horizontal intercept QuantityQ 0 20 40 60 80 100 120 0 4080 120160200 Horizontal intercept = 200 Vertical intercept = 100

13. 13 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Table 2.3 Demand schedule Quantity (x)Price (y) 0100 4080 8060 12040 16020 200 0 Intercept (vertical) = 100 Slope = - 0.5: Horizontal intercept = 200 Demand Function P =100 - 0.5Q : Join the horizontal and vertical intercepts Figure 2.19 Join the horizontal and vertical intercepts QuantityQ Price P D : Demand 0 20 40 60 80 100 120 0 4080 120160 200 240

14. 14 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd The General Linear Demand function such as 0 20 40 60 80 100 120 0 4080 120160 200 240 Figure 2.19 Demand function,P = 100 - 0.5Q a = 100 P = 100 - 0.5Q D Q P Slope = -b = - 0.5 a b  200 P = a - bQ P = 100 - 0.5Q

15. 15 Copyright©2001 Teresa Bradley and John Wiley & Sons Ltd Supply Function P = 10 + 0.5Q Calculate and plot the supply schedule P = 10 + 0.5Q Table 2.4 Supply schedule Q: Quantity P: P = 10 +0.5Q 010: P =10 +0.5(0) 2020: P = 10+0.5(20) 4030 6040 8050 10060 Intercept (vertical) = 10 Slope = 0.5 Horizontal intercept = - 20 P = 10 + 0.5Q NOTE: the supply function may be plotted by simply joining the intercepts Figure 2.22 c = 10 P = 10 + 0.5Q Slope = 0.5 Q P S