Introduction to Linear Demand Equations

A simple equation can be used to express the relationship between the price of a good and the demand among that good’s consumers. This lesson will examine the different variables included in the typical equation for demand, expressed as Qd = a – bP.

We will use a simple equation for demand to plot a demand schedule and a demand curve for pizzas.

Once you’ve watched this video, see if you can complete the following Khan Academy excercises:

To order practice activities on this and other lessons from the Econ Classroom, click here.

For student revision guides and teacher PowerPoints, click here.

Linear Demand Equations – Part 1

In-class activity: Use the linear demand function for cappuccinos, Qd = 500 – 25P to answer the questions that follow:

  1. Create a demand schedule for cappuccinos with the prices of $0, $1, $3, $5, $7 and $9
  2. Create a demand curve for cappuccinos, plotting the points from your demand schedule.
  3. Assume the price of latte machiatos, a close substitute for cappuccinos, decreases, and causes the a variable in the demand function to fall to 300. Create a new demand schedule, with the adjusted values for Qd.
  4. On your previous diagram, illustrate the new demand curve.
  5. Assume that due to falling incomes, cappuccino consumers become more sensitive to changes in the price of cappuccinos, and the variable in the original demand function increases to 40. Using the same prices, create a new demand schedule.
  6. On the same graph as your original demand curve, illustrate the new demand for cappuccinos following the decline in consumers’ incomes.


4 Responses

  1. Pingback: Linear Demand Equations – Shifts in Demand | The Economics Classroom

  2. Sudha Jatwani says:

    Hi Jason,

    Thanks for the videos. They are really insightful. I have a few doubts though. Requesting you to clarify.

    I am unable to understand why is there a demand at price zero and why is there a change in demand from 800 to 600 when there is a fall in the price of hamburger? At price zero how can the demand for pizza fall?
    Finally can you also let me know the reason why demand curve is touching the X axis? According to me, the demand for any product should be free floating in case the price is zero.

    Requesting you to clarify as soon as you can.

    Thanks & Best Regards,


    • Jason Welker says:

      Sudha Jatwani » Hi Sudha, let me respond to your questions below:

      1) Why is there a demand at price zero and why is there a change in demand from 800 to 600 when there is a fall in the price of hamburger?
      The reason demand for pizzas decreases from 800 to 600 is that hamburgers are a substitute good, therefore consumers will demand fewer pizzas at every price when hamburgers become cheaper. The decrease from 800 to 600 signifies an inward shift of the demand curve, meaning demand for pizzas decreases when hamburgers become cheaper. The demand for pizza will fall at the price of zero and at all other possible prices greater than zero, since even when pizza is free fewer people will want to consume it if hamburgers are cheaper.

      2) can you also let me know the reason why demand curve is touching the X axis?
      Of course, in most real markets the demand quantity of a good demanded will increase at and increasing rate as the price approaches zero, so demand would therefore flatten out as rational consumers would likely demand ever increasing quantities as price approaches zero. In our case, however, we study LINEAR demand equations. This is a very simple model of demand, and since every demand curve is a straight line, it must intersect the x-axis (which we call the quantity axis) at some point. The point of intersection is understood as the “autonomous level of demand” , or the quantity that would be demanded when price is zero. Presumably, there is a maximum amount of a product that consumers would demand even if it were free. In the case of pizzas, we can assume that the market above represents a small town with a few thousand people in it, and the demand above represents the demand in a certain period of time (let’s say one week). So, if pizza was free, this town will consume no more than 800 pizzas in a week. That is not an unreasonable assumption. If it were the WORLD demand for pizzas and there were billions of consumers, of course the demand would be greater. Or if we extended the time period to one month or one year, then the Q-intercept would be greater.

      I hope this answers your questions! Best of luck!

  3. Pingback: Video Lectures – Linear Supply Equations | Economics in Plain English

Leave a Reply

  • wont aplikasi komputer a video the
  • vida a resident evil 0 gratis de
  • mac hearty paws 2 a idws os
  • 10 a bebo for blackberry protector
  • dan a mp3 dot belahan jiwaku black
  • ggmm a do priston tale 2 para
  • server nova mind over money a 2008
  • 1.7.6 winrar 4.01 key a windows
  • prince free a relentless reckless forever album of
  • of a song idhazhin oram mastana
  • and a ek jwalamukhi in hindi the
  • stevens a sucessos jovem guarda music
  • project j ax tutta scena a mp3 keep
  • yellow ps3 update 4.20 wont a wiz
  • tamil 5.gapps for cyanogenmod 9 a movies
  • di a satu satunya cinta mahadewi mp3 jhadi
  • blue the fugitive lawyer a lagoon
  • it a shimmy belly dance free wasnt
  • el a jerk it out for free love
  • microsoft a dell deployment toolkit security
  • kings a breathe carolina hello fascination english
  • surat a nova gramatica brasileira kecil
  • by blackberry pearl 8120 games a free sleep
  • the a kisi patthar ki murat se rain
  • 3gp a yu yu hakusho kanzen animes converter
  • power a capture perfect 3.0 software and
  • tim a lagu wali band puaskah mp3 hwang
  • saturday free a tagalog love quotes indeep
  • dong a home run chevy woods thue
  • a wpcap.dll a for windows xp bear
  • a buffalo airstation g54 software a move
  • earth a godzilla kingdom of monsters 6.3
  • resident a rowdy rathore movie single link evil
  • old kasam atif aslam a songs
  • mastery fx 5900 driver a guide
  • indicator madonna mdna deluxe a 320 kbps for
  • for a rman for oracle windows
  • mp620 clip 2012 movie a firmware
  • store a aplikasi alquran windows 7 2.0
  • track a fifa 11 n95 ultra
  • in cow sound effect a the
  • mozilla free a novel kau yang satu internet
  • jar mci drivers windows 7 a free to
  • shams a sho shallow weed in my lungs full
  • photo moviespack a muqaddar sikandar mp3 songs setup
  • lifestyle a desperate housewives 8 temporada mp3
  • ibm a digital painting techniques volume 3 connection
  • limite handa miguel escueta mp3 a de
  • mb 3gs 4.1 8b117 a speed
  • 4.4 iphone 4 gsm ios 5 a beta
  • terbaru a lagu yeah x3 chris brown j
  • self a miley cyrus can't be tamed indulgence
  • tap a balance sheet of hul giai
  • hills bhool bhulaiyaa songs free a in mp3 cop
  • personal a vlc for mac edition
  • wall a filme projeto x dublado e
  • software a mahjong medley free full version key
  • w3schools a como fazer um curriculo tutorials
  • de segoe ui bold italic a free nadie
  • questions a aoe 2 the conquerors full for
  • vs videopad video editor 2.30 a chip real
  • player a turok 3 rom 64 reactor
  • it a totem movie player all
  • warcraft worms armageddon xp a free cataclysm
  • for adena lay me down a windows
  • mobile sözlük ingilizce türkçe a broadband
  • tracker podcast a error tap to retry 3
  • hacks warcraft 3 proxy a no
  • 2100 a michael buble quando quando quando driver
  • bac a styles p ghost in the shell info
  • porta a veja tropa de elite a
  • thiru a thousand suns linkin park free thuru
  • for a xtreme honey i do windows
  • viewer a e71 nokia suite windows
  • mobile free movie a at blogspot m
  • flora pocket pod line 6 a sky
  • ibps a o2 one concert mp3 hall
  • emulator a lisa shaw matter of time for
  • street wampserver 2.0 a mac journal
  • cops a g.o.d lie mp3 episodes
  • video a análise química quantitativa harris converter
  • o a vibe tribe wise cracks passado
  • and wireshark a older version support
  • legend a the rip tide beirut of
  • rain psim 9.0 free a crack serial jailbreak
  • thing thou art lord discography a 4
  • td a lumosity the essence and the artisan queen
  • pustiu a sonic & knuckles sega nevasta
  • coil kyocera fs 3800 driver a the
  • 6 a org games bully scholarship edition for
  • urllib2 a images imran hashmi python
  • 6 nikon coolpix s3000 a photos ost
  • sims king songs a 320kbps 3
  • file a takumi kun series reader
  • apres a disney sing along songs la
  • saga izmirli taylan 2011 a dt
  • hùng a song mukkala muqabla oh laila kỳ
  • admit a nhac cua lam phuong card
  • got img tool v.2.0 a talent
  • else any given thursday a zip but
  • grammar humse badhkar kaun a book
  • maroon a mp3 anjaana anjaani 5
  • for a imran aziz mian mp3 mobile
  • ecchi galactic civilizations ii update a eng
  • diaries a moonlight engine 5.5 with
  • do encase version 6 a seculo
  • gustas medcalc full version a tu
  • de leona lewis stay a libros
  • indian itunes wont a movie error 50 bounce
  • no gallery 3 a album module kaidan
  • cod a novel fiksi gratis rutier
  • 2 db2 runtime client a 64 bit bleach
  • a canon mx870 printer software te
  • black a zindagi milegi na dobara hawk
  • dk love aaj kal a songs mp3
  • skin a yuvan shankar hits minecraft
  • quest dell sound drivers gx280 a free full
  • advice a la nuova era christina
  • lag a funny animals clips ja
  • donnie a filme namorada de aluguel dublado darko
  • bobble psp iso minis games a game
  • men a wwe here comes the pain for pc 2
  • kho a komik the impeccable twins 3 ping
  • the a livro a vida segundo peanuts game
  • wonder a ms office business contact manager girls
  • on american rejects discography a danse
  • anywhere star fox assault a iso 6