Suppose the demand for a good was given by the function: QD = 230 - 0.1 P.Calculate the choke price of this demand function.(Do not include a $ sign in your response.)

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To determine the choke price, we look for the price at which quantity demanded falls to zero. Start from the demand equation QD = 230 − 0.1P. Set QD to zero to find the price that eliminates demand: 0 = 230 − 0.1P. Next, isolate P by moving 0.1P to the other side: 0.1P = 230. Then divide both sides by 0.1 to solve for P: P = 230 / 0.1 = 2300. Since the instruction says not to include a dollar sign, the choke price is 2300 in the same monetary units as P in the model. A quick sanity check: plugging P = 2300 back into QD gives QD = 230 − 0.1×2300 = 230 − 230 = 0, which confirms that this price indeed yields zero quantity demanded. It’s important to note that the choke price represents the market price where demand entirely disappears, not a price at which any positive quantity is purchased. If a student accidentally sets QD to a nonzero value or misapplies the coefficient, they might arrive at an incorrect price, so solving algebraically and verifying by substitution helps avoid such errors.

ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

Suppose the demand for a good was given by the function: QD = 230 - 0.1 P.Calculate the choke price of this demand function.(Do not include a $ sign in your response.)

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ECON 302 AL1 SP25: Inter Microeconomic Theory (Buckley, B)

Suppose the demand for a good was given by the function: QD = 230 - 0.1 P.Calculate the choke price of this demand function.(Do not include a $ sign in your response.)

View Explanation

Log in for full answers

Similar Questions

The image above shows which demand curve?

Suppose the demand equation for a product is given by: Qd = 50 - 12\frac{1}{2}P b) Calculate the price at which consumers would demand 10 units of the product. Price: $ [Fill in the blank],

Suppose that a consumer had a utility function given by: U=X2Y4. This consumer has a budget of $12.Fill in the value of this consumer's demand function. X = Answer Question 3[input]*(1/Px).(For instance, if X = 4/Px, then X = 4 * (1/Px) and enter 4)

Suppose the demand function for Good X was given by: QDx = 58 - 4Px.Calculate the reservation price for the 38th unit.(Do not include a $ sign in your response.)

The demand function for this good is given by: QD= 225 -0.5P. Find quantity demanded when price is $300.

More Practical Tools for Students Powered by AI Study Helper

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Suppose that a consumer had a utility function given by: U=X2Y4. This consumer has a budget of $12.Fill in the value of this consumer's demand function. X = Answer Question 3[input](1/Px).(For instance, if X = 4/Px, then X = 4 (1/Px) and enter 4)