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Linear Demand Function

The demand function can be written in the form of an equation

Qa = a = bP where Qd is quantity demanded

  • a is a constant – determined by non-price factors
  • P is the price of the product
  • For example:
  • Demand for Product Y = 200 – 4P

If the market price is £40, then Qd = 200 – 160 = 40 units

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