WAEC Economics 2017 Theory — Question 7
Question 7 of 23 from the West African Examinations Council (WAEC) Economics 2017 Theory paper, with the correct answer and a full explanation.
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2(c) Suppose the demand function changed to Qd=40-p. Using the prices in (a) above: (i) prepare a new demand schedule; (ii) does it represent an increase or a decrease in demand? (iii) explain your answer in (c)(ii) above.
Model answer
(i) New demand function Qd=40-P: at Price=2, Qd=40-2=38; Price=4, Qd=40-4=36; Price=7, Qd=40-7=33. (ii) It represents an increase in demand. (iii) Since the new quantity demanded at the same level of price increases (compared to the original schedule), then it is an increase in demand.
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