a departmental store of mumbai conducted a study of the demand for men's ties .it found that the average daily demand (D) in terms of price (P) is given by D= 120-5P. what is the highest price anyone will willing to pay
Answers
Answer:The maximum price is 24.
Explanation:
a departmental store of mumbai conducted a study of the demand for men's ties .it found that the average daily demand (D) in terms of price (P) is given by D= 120-5P. what is the highest price anyone will willing to pay:-
So here the question regarding the basics of D and P the demand and price and it is that we need to get things clear about these terms:-
The relationship between demand and price: the law of demand is a general relationship between price and consumption: when the price of a good rises, the quality demanded will fall. The quality of the good demanded per period of time will fall as price rises and will rise as price falls, other things being equal. There are two reasons for this law: Firstly, people will feel poorer, the purchasing power. This is called the income effect of a price rise. And the second, the good will now be dearer relative to other goods. This is called the substitution effect of a price rise. Similarly, when the price of a good falls, the quantity demanded will rise. For example, if the price of coffe rises, we will probably drink more tea, cocoa, fruit juices … Demand curve is a graph showing the relationship between this price of a good and the quantity of the good demand over a given time period. Price is measured on the vertical axis; quantity demanded is measured on the horizontal axis. The demand curve show that the lower the price of a product the more quantity other determinants will be demanded: Firstly, price is not the only factor that determines how much of the good people will buy, Demand is also affected by the following: tastes, the number and price of substitute goods, the number and price of complementary goods, income, distribution of income, expectations of future price changes. Movements along and shifts in the demand curve. A demand curve is constructed on the assumption that ‘other thing remains equal’. One of these other determinants does change, causes demand to rise, the whole curve will shift to the right, this shows that at each price:-
So from this it is clear that the maximum price occurs when the demand is zero for that product in its:-
So now using the equations:-
D=120-5P so:-
At demand equal to zero the price is maximum put in the question and solve for P:-
D=0=120-5P and solve it:-
120=5P and:-
P=24 the maximum price is 24.
Answer:-The maximum price is 24.
For more questions:-https://brainly.in/question/31669298
#SPJ1