Q.Prepare a demand schedule for a hypothetical commodity using the linear demand function Qd = 120 − 5P, for prices P = ₹4, ₹8, ₹12, ₹16 and ₹20. Also state what happens to quantity demanded at P = ₹24, and comment on the result.

A linear demand function lets quantity demanded be computed directly for any price by substitution.

Demand function: $Q_d = 120 - 5P$.

Substituting each price:

• $P = 4$: $Q_d = 120 - 5(4) = 120 - 20 = 100$
• $P = 8$: $Q_d = 120 - 5(8) = 120 - 40 = 80$
• $P = 12$: $Q_d = 120 - 5(12) = 120 - 60 = 60$
• $P = 16$: $Q_d = 120 - 5(16) = 120 - 80 = 40$
• $P = 20$: $Q_d = 120 - 5(20) = 120 - 100 = 20$

Resulting demand schedule:

This schedule confirms the Law of Demand throughout this price range: as price rises steadily by ₹4 at each step, quantity demanded falls steadily by 20 units — a straight-line (linear) demand curve with a constant slope. …

Cross-check: the function's own price-intercept is found by setting $Q_d = 0$: $0 = 120 - 5P \Rightarrow P = 24$, wh …

Extending a linear demand function beyond the price at which quantity demanded reaches zero, and reporting a negative quantity as if it were meaningful — a demand function's line …