Suppose the market demand curve for pizza can be expressed as QD = 100

Suppose the market demand curve for pizza can be expressed as QD = 100 – 2P + 3Pb, where QD is the quantity of pizza demanded, P is the price of a pizza, and Pb is the price of a burrito. What is the slope of this demand function, and what information does the slope provide?

What will be an ideal response?

ANSWER

The slope is -2. The slope tells us how a change in the price of pizzas affects the quantity of pizzas demanded. An increase in the price of pizzas by $1 will result in a decrease of the quantity demanded by 2 pizzas.