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Worked Examples · Example 2

Q.A demand schedule shows that when price is Rs. 10, quantity demanded is 20 units; when price falls to Rs. 8, quantity demanded rises to 30 units. Treating price (P) as the Y-axis variable and quantity (Q) as the X-axis variable, find the slope of this demand line.

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Step 1 — Identify the two points, with P on the Y-axis and Q on the X-axis: (Q1,P1)=(20,10)(Q_1, P_1) = (20, 10) and (Q2,P2)=(30,8)(Q_2, P_2) = (30, 8).

Step 2 — Apply the slope formula:

m=P2−P1Q2−Q1=8−1030−20=−210=−0.2m = \dfrac{P_2 - P_1}{Q_2 - Q_1} = \dfrac{8 - 10}{30 - 20} = \dfrac{-2}{10} = -0.2

Step 3 — Independent check (dual-solve). Reversing the order of the two points must give the same slope: m=10−820−30=2−10=−0.2m = \dfrac{10-8}{20-30} = \dfrac{2}{-10} = -0.2. ✓ Matches.

Step 4 — Interpret. The slope is negative, as expected for a demand line — price and quantity demanded move in opposite directions. Its size, 0.2, means price falls by Rs. 0.2 for every one-unit rise in quantity demanded (equivalently, quantity demanded rises by 5 units for every Rs. 1 fall in price, since 1÷0.2=51 \div 0.2 = 5).

✓Final answer

Slope m=−0.2m = -0.2 (negative, confirming the expected downward-sloping demand line).

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