I need Econ help!

[babypanda]

Can someone please help me with this question? I feel like such an idiot because it's part of a group assignment and I don't want to let the rest of my group members down...


"Suppose the demand for a particular product can be expressed as q=100/p. Calculate the total amount spent on this good when p=10, 20, 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in the market?"


My thoughts are to plug in p into the equation q=100/p, and then multiply PxQ to get the total amount spent.... Does that sound right?

 

[b0mbrman]

Yeah. That'll do.

Here's a hint. Look at the equation--p x q will always be 100

 

[babypanda]

The total amount spent is 100 in every scenario.....that doesn't make sense?

 

[b0mbrman]

Originally posted by: babypanda
That sounds too simple...

Uh...I don't know what to tell you

 

[ElFenix]

linear functions basically operate like that

 

[halik]

Originally posted by: babypanda
Can someone please help me with this question? I feel like such an idiot because it's part of a group assignment and I don't want to let the rest of my group members down...


"Suppose the demand for a particular product can be expressed as q=100/p. Calculate the total amount spent on this good when p=10, 20, 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in the market?"


My thoughts are to plug in p into the equation q=100/p, and then multiply PxQ to get the total amount spent.... Does that sound right?

p=10
q = 100 / p = 100/10 = 10

so q = 10 and p =10 => total amt spent = p *q = 100

edit:
to generalize
p= x
q = 100/p

q = 100/x and p = x => total amt spent = p *q = x * 100/x = 100


<- 6 credits way from getting an econ degree

 

[babypanda]

what would this say about the consumer behavior regarding this demand curve? All the answers are 100....


Thanks for everone's help btw.


-Sarah

 

[smc13]

q=100/p

so if p=100 q=1
if p = 50 q=2
if p = 25 q=4
if p = 10 q=10
if p = 1 q=100

So q changes dramatically based on p. When p is 100, q is low. When p is 1, q is high. As p increases q drops in a hurry and then tapers off. You should be able to grab a piece of paper and a pen and make a simple qraph, can't you?

 

[Howard]

This is a hyperbolic function, if I'm not totally crazy.

I don't know how that helps you. 😀

 

[UncleWai]

I think you need to tie your findings back to law of demand and diminishing marginal return.

 

[alexeikgb]

Originally posted by: babypanda
what would this say about the consumer behavior regarding this demand curve? All the answers are 100....


Thanks for everone's help btw.


-Sarah

The function means that the consumer will demand more if the price is low, and less if the price is hight. This is a typical demand function.

<--- Econ/CS degree

 

[NiKeFiDO]

yeah im not sure how complicated your teacher wants this or what you've learned so far....

 

[Toastedlightly]

Well, I took AP Macro and Micro econ in 9th grade. That was over 2 years ago. Here is what I remember from Micro: MC=MR.

 

[Orsorum]

Originally posted by: babypanda
Can someone please help me with this question? I feel like such an idiot because it's part of a group assignment and I don't want to let the rest of my group members down...


"Suppose the demand for a particular product can be expressed as q=100/p. Calculate the total amount spent on this good when p=10, 20, 50. Can you make a generalization about the mathematical form of this demand curve and consumer behavior in the market?"


My thoughts are to plug in p into the equation q=100/p, and then multiply PxQ to get the total amount spent.... Does that sound right?

q=100/p ==> p * q = 100; when p=10, q=10; p=20, q=5; p=50, q=2. Graph it out and draw a line through it, then realize that the function is going to be asymptotic as the function draws closer to each axis. (hyperbolic, I think)

As alexeikgb said, this is a typical demand function, except for the axes. As P goes from $1 to $0 per unit the quantity demanded increases rapidly (asymptotically, again).

<--- been way too long since he's looked at demand functions, I'm knee-deep in acctg at the moment.

It's hard to determine exactly what kind of response to give because we're not sure what class level you're in, what material you've already covered, etc.

 

[DaWhim]

draw a graph

x axis = quantity
y axis = price

the demand slope downward. so you will see when price is $10, you get more, the quanatity you can get decrease as the price increase.