Q:

# What is a demand equation?

A:

A demand equation is an algebraic representation of product price and quantity. Because demand can be represented graphically as a straight line with price on the y-axis and quantity on the x-axis, a demand equation can be as basic as a linear equation. They can also be much more complex, however, and can require significant algebraic manipulation.

## Keep Learning

Linear equations can be derived as long as two points on the graph are known. These are used to determine the slope, and then, there are several methods by which someone can determine the y intercept and complete the equation once the slope is found. Once the general linear equation has been completed, it can be used to predict demand based on either the cost or quantity variables.

Sources:

## Related Questions

• A: Prices are determined in a free market economy through the interactions of supply and demand in the marketplace, where demand is the quantity of a product ... Full Answer >
Filed Under:
• A: Nominal gross domestic product is the sum of the price and quantity for each good or service in for a specific period of time. To calculate nominal GDP, an... Full Answer >
Filed Under:
• A: Optimal sales price is calculated as the necessary revenue to achieve a desired profit margin divided by the quantity of product units forecast to sell, ex... Full Answer >
Filed Under:
• A: The "concept of elasticity of demand" measures the relationship between a change in the price of a product and the corresponding change in the quantity dem... Full Answer >
Filed Under:
PEOPLE SEARCH FOR