Answer:
Demand function:
[tex]p =-0.6q +910[/tex]
Step-by-step explanation:
We are given the following in the question:
The monthly demand of stereo system is 350 when the price is $700. When the price is $640, the monthly demand is 450.
We have to find the equation for the demand function.
The demand function is linear and have form:
[tex]p = mq + b[/tex]
where p is the cost and q is the demand, m is the slope and b is the y-intercept of the line.
[tex](p-p_1) = \displaystyle\frac{p_2-p_2}{q_2-q_1}(q-q_1)[/tex]
The equation of demand function is:
[tex](p-700) = \displaystyle\frac{700 - 640}{350-450}(q-350)\\\\(p-700)= -0.6(q-350)\\p =-0.6q +910[/tex]
