Explain the concept of linear demand function and calculate its slope.

1.	Explain the concept of linear demand function and calculate its slope.
Answer» <P> Solution :The linear demand function MAY be written in the form: `Q_(d) = a-bp` Where `Q_(d)`=Quantity demanded of a commodity, a = Value of X (Quantity demanded) when Y (price) is ZERO. b `=(DeltaQ)/(DeltaP)` i.e., CHANGE in quantity demanded for a unit change in price. P = own price of the commodity Calculate of slope of demand curve Linear dd curve implies a constant slope `Q_(d) = a-bp` `bp = a-Q_(d)`or`P=(a)/(b)-(1)/(b)Q_(d)` where `(-)(1)/(b)` is the slope of dd curve. Since `b=(DeltaQ)/(DeltaP)`, slope `(-)(1)/(b)` will be: `(-)(1)/((DeltaQ)/(DeltaP))"or"P=(a)/(b)-(1)/(b)Q_(d)` `-(DeltaP)/(DeltaQ)`=Slope of dd curve `=("Change in the variable measured on vertical axis")/("Change in the variable measured on horizontal axis")` For example : The demand function of a good is `Q_(d) = 20-4P`. Calculate its slope `Q_(d)=20-4P` or 4P = 20- Q `P=(20)/(4)-(1)/(4)Q` slope `=(-)(1)/(4)` or b = -4 (given) Slope of dd curve is `(1)/(b)`. Hence slope is `(-)(1)/(4)`.

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