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). Use your demand equation to predict sales if the company lowered the price further to $70. (b) Fill in the blank. For every $1 increase in price, sales of cell phones decrease by 2 million units.

Solution

(p, q) = ( 95 , 113) and ( 91, 121)

slope = ( 121 -113)/( 91 -95) = -2

q(p) = p*m +k

113 = -2*95 +k ; k = 303

q(p) = -2p +303

b)q(70) = -2*70 +303 = 163 millions