Lines And Slopes Worksheets With Answers - Hec Montreal (Page 3 of 9) in pdf

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We just calculated that

4. The equation of the present line is

. We also know that the point 1,4 is located on this line and must

therefore satisfy its equation :

4 1

→ 4

→

Once again, the choice of the point used does not affect the outcome. Had we

chosen the point (2,8), the calculation would have shown:

4 2

→ 8

→

intercept now being known, the line equation is

The slope and the

3. Microeconomic applications

3.1.

Demand curve

Example 1

Let us assume that the demand curve is described by the following line

. Find its equation given the following information: a promoter

discovers that the demand for theater tickets is 1200 when the price is $60, but

decreases to 900 when the price is raised to $75.

Solution :

The form of the equation

indicates that the price , is the

independent variable (like ), and the quantity , is the dependent variable (like

y). The problem allows us to deduce two points of the demand line: the points

(60$, 1200) and (75$, 900). We must identify the slope and the –intercept of

the line.

Slope :

∆

900

1200

300

∆

The equation must therefore take on the following form:

. It is

necessary to find the ‐intercept using one of the two points.

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