The following table shows worldwide sales of cell phones by

The following table shows worldwide sales of cell phones by a certain company and their average wholesale prices in the first quarters of 2009 and 2010. (a) Use the data to obtain a linear demand function for the company\'s cell phones. (Let p be the price, and let q be the demand). q (p) = Use your demand equation to predict sales if the company lowered the price further to $70. million phones (b) Fill in the blank. For every $1 increase in price, sales of cell phones decrease by million units.

Solution

we have two points from the data

( 85,103) and (81 , 111)

finding eqution from these points

m = ( 111 - 103) / ( 81 - 85 )

m = -2

103 = -2(85) + b

b = 273

hence, linear function is

q(p) = -2p + 273

if price is lowered to $ 70

q(p) = -2(70) + 273

= 133 million phones

b) since the slope of line is -2

so, for every $1 increase in price , sales of cell phone decreases by 2 million units