Question

Suppose you interview 200 people to determine their response to your new product. You offer the product at a price of $12 to 100 of the people, and at a price of $15 to the other 100 people. Of the people facing the the $12 price, 36 people buy, and of the people facing the $15 price, 30 people buy. Your best guess is that the demand curve you are facing (per 100 people) is:

A. Q=66−2P

B. Q=66−1/2 P

C. Q=33−2P

D. Q=33−1/2 P

Answer 1

Option D

By imputing the price in the equations we get

P	A	B	C	D	Actual
12	42	60	9	27	36
15	36	58.5	3	25.5	30

As the average of 36 and 30 is 33, we need to select option D as it close to actual values