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Worked Examples · Example 1

Q.Let us assume that the demand curve is described by the line q=mp+bq = mp + b. Find its equation given that a promoter discovers that the demand for theatre tickets is 1200 when the price is Rs. 400, but decreases to 900 when the price is raised to Rs. 450.

Chandigarh CbseNCERTSubjective· 2mImportance★★★★★est
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✓ Free question

Two given (price, demand) points determine the slope mm and intercept bb of the straight-line demand equation q=mp+bq=mp+b.

Straight line through two points (p1,q1)(p_1,q_1) and (p2,q2)(p_2,q_2):

m=q2−q1p2−p1,q−q1=m(p−p1)m = \frac{q_2-q_1}{p_2-p_1}, \qquad q - q_1 = m(p-p_1)

  1. Identify the given data as two points (p,q)(p,q).

(p1,q1)=(400,1200),(p2,q2)=(450,900)(p_1,q_1) = (400, 1200), \qquad (p_2,q_2) = (450, 900)

  1. Compute the slope mm.

m=q2−q1p2−p1=900−1200450−400=−30050=−6m = \frac{q_2-q_1}{p_2-p_1} = \frac{900-1200}{450-400} = \frac{-300}{50} = -6

  1. Find bb using point (400,1200)(400,1200) in q=mp+bq=mp+b.

1200=(−6)(400)+b=−2400+b1200 = (-6)(400) + b = -2400 + b

b=1200+2400=3600b = 1200 + 2400 = 3600

  1. Write the demand equation.

q=−6p+3600q = -6p + 3600

  1. Self-check. At p=400p=400: q=−6(400)+3600=−2400+3600=1200q=-6(400)+3600=-2400+3600=1200 ✓. At p=450p=450: q=−6(450)+3600=−2700+3600=900q=-6(450)+3600=-2700+3600=900 ✓. Both given points satisfy the equation. The negative slope also makes economic sense: demand falls as price rises.
✓Final answer

q=−6p+3600q = -6p + 3600 (demand for tickets falls by 66 for every ₹11 rise in price).

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