Why does the line slope downwards

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Reference no: EM131754200

Question: A firm finds that the demand for its product can be represented mathematically as:

Qd = 1000 - 5P

where Qd is the number of units of the product demanded by customers and P is the selling price.

(a) Construct a graph for a price between 0 and 200.

(b) Comment on the shape of the graph. Why does the line slope downwards?

(c) If we define revenue as quantity sold times price, obtain an equation for revenue.

(d) Draw a graph of this revenue equation.

(e) What price should the firm charge in order to maximise revenue?

Reference no: EM131754200

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