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 of a change in p must occur for Q to increase by one?
A) fall by 25¢
B) fall by $4
C) increase by 25¢
D) fall by $4.25

Question

Quizplus · Accepted Answer

To increase Q by 1 (or 1000 units), solve for the change in p: 1 = -0.25(change in p). Thus, change in p = -4, meaning p must fall by $4.

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