Suppose the demand for Digital Video Recorders (DVRs)is given by Q = 250 - .25p + 4pc,where Q is the quantity of DVRs demanded (in 1000s),p is the price of a DVR,and pc is the price of cable television.How much does the quantity demanded for DVRs change if the p rises by $40?
A) drops by 10,000 DVRs
B) increases by 16,000 DVRs
C) drops by 2,500 DVRs
D) increases by 4,000 DVRs

Question

Quizplus · Accepted Answer

The demand equation is Q = 250 - 0.25p + 4pc. If p increases by $40, the change in Q is -0.25 * 40 = -10. Thus, the quantity demanded drops by 10,000 DVRs (since Q is in thousands).

Suppose the Demand for Digital Video Recorders (DVRs)is Given by Q