Using the demand schedule below representing a linear demand curve, answer the following question. If the price increases by $20 then the quantity demanded will ____________.

Price

Quantity

$300

15

$250

30

$200

45

$150

60

Question

Using the demand schedule below representing a linear demand curve, answer the following question. If the price increases by $20 then the quantity demanded will ____________.

Price

Quantity

$300

15

$250

30

$200

45

$150

60

BlackTom AI · Accepted Answer

Let’s unpack the data and apply the concept of a linear demand schedule. A linear demand curve shows quantity demanded changing as price changes, with a constant slope.

First, compute the slope using two points from the table to understand how quantity responds to price changes. Between price $300 and $250, quantity changes from 15 to 30. The price falls by $50 while quantity rises by 15, so the slope is ΔQ/ΔP = 15/(-50) = -0.3. This means for every $1 increase in price, quantity demanded falls by 0.3 units on this line.

Now consider a price increase of $20. Apply the slope to estimate the change in quantity: ΔQ = slope × ΔP = (-0.3) × (+20) = -6. In words, quantity demanded decreases by 6 units when price goes up by $20.

Evaluate the answer choices one by one:

Option A: Decrease by 15. This would require a larger price change or a different slope; with the calculated slope, a $15 decline would imply ΔQ = -0.3 × 15 = -4.5, which is not an integer change and does not align with the given data pattern. Therefore this option misstates the effect.

Option B: Increase by 15. An increase in price would never cause an increase in quantity demanded on a standard downward-sloping demand curve, so this option contradicts the basic law of demand and is inconsistent with the data given.

Option C: Decrease by 6. This matches the calculation using the slope of the line: a $20 price increase yields a 6-unit drop in quantity demanded. It aligns with the linear relationship inferred from the table.

Option D: Increase by 6. Similar to Option B, this asserts an increase in quantity with a price rise, which conflicts with the downward-sloping demand pattern evidenced by the data. It does not fit the calculated change.

In summary, the correct interpretation of the linear demand data shows that a $20 price increase corresponds to a 6-unit decrease in quantity demanded, matching the relationship implied by the slope -0.3. The other options either reverse the direction of the change, are inconsistent with the data, or do not reflect the implied linearity of the schedule.

ECON 2002.01 AU2025 (21333) Final Exam- Requires Respondus LockDown Browser

Using the demand schedule below representing a linear demand curve, answer the following question. If the price increases by $20 then the quantity demanded will ____________. Price Quantity $300 15 $250 30 $200 45 $150 60

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