The demand function for a pack of four Never Die Batteries is Qd = (62 million)- (8 million × P). The company is currently charging a price of $5 per package, but is considering decreasing the price to $4. How will the decrease in price affect how many packages of batteries consumers will buy?

Question

Quizplus · Accepted Answer

To find out the effect of a decrease in price from $5 to $4, we need to plug in the new price into the demand function and calculate the new quantity demanded:

Qd = (62 million) - (8 million x $4)
Qd = 30 million

Comparing this to the original quantity demanded of 22 million (using $5 as the price), we see that consumers will increase the quantity demanded by 8 million if the price is decreased from $5 to $4. Therefore, answer D is correct.

The Demand Function for a Pack of Four Never Die