(Advanced analysis) The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. If demand changes from P = 10 - .2Q to P = 7 - .3Q, we can conclude that

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Quizplus · Accepted Answer

The new demand curve shows a decrease in the quantity demanded for every price. This means that at each price level, buyers are now willing to buy fewer units of the commodity X. Therefore, the demand has decreased. The supply curve is not affected by this change in demand, as it is still represented by the same equation (P = 2 + 0.2Q). Hence, choices C and D are incorrect.

(Advanced Analysis) the Demand for Commodity X Is Represented by the Equation