Question

The demand function of a product X is given as: Dx = 20 − 3Px, where Px stands for price. If an Individual Y has a demand of 8 units, then market price of the product is ______.

Options

• ₹ 4

• ₹ 5

• ₹ 3

• ₹ 4.5

Answer 1

The demand function of a product X is given as: Dx = 20 − 3Px, where Px stands for price. If an Individual Y has a demand of 8 units, then market price of the product is ______.

Explanation:

Set demand equal to 8 and solve: $$8=20-3P_x;\Rightarrow;3P_x=12;\Rightarrow;P_x=₹4.$$ The other listed prices do not satisfy the demand function.