Figure 5-1

-Refer to Figure 5-1.Assume,for the good in question,two specific points on the demand curve are (Q = 1,000,P = $40)and (Q = 1,500,P = $30).Then which of the following scenarios is possible?
A)Both of these points lie on section C of the demand curve.
B)The vertical intercept of the demand curve is the point (Q = 0, P = $60).
C)The horizontal intercept of the demand curve is the point (Q = 1,800, P = $0).
D)Any of these scenarios is possible.

Question

Figure 5-1
 
-Refer to Figure 5-1.Assume,for the good in question,two specific points on the demand curve are (Q = 1,000,P = $40)and (Q = 1,500,P = $30).Then which of the following scenarios is possible?
A)Both of these points lie on section C of the demand curve. 
B)The vertical intercept of the demand curve is the point (Q = 0, P = $60). 
C)The horizontal intercept of the demand curve is the point (Q = 1,800, P = $0). 
D)Any of these scenarios is possible.

Quizplus · Accepted Answer

The vertical intercept can be calculated using the two given points on the demand curve. The slope of the demand curve is -1/50, and using the point-slope form, the vertical intercept is found to be (Q = 0, P = $60).

Figure 5-1 -Refer to Figure 5-1.Assume,for the Good in Question,two Specific Points