Understanding Demand Function and Pricing

The video tutorial explains a demand function where the price per unit is determined by the number of items in demand. It demonstrates how to calculate the price per unit when 13,800 units are in demand using the formula D(Q) = -0.007Q + 100. The calculation shows that the price per unit should be $3.40 to sell all 13,800 units. The tutorial concludes by reinforcing the relationship between demand and pricing.

What does the demand function D of Q = -0.007 Q + 100 represent?

• The price per unit based on the number of items in demand

• The cost of producing Q items

• The total revenue from selling Q items

• The relationship between supply and demand

If 13,800 units are in demand, what is the first step to find the price per unit?

• Divide 13,800 by the demand function

• Substitute 13,800 into the demand function

• Multiply 13,800 by 100

• Add 13,800 to the demand function

What is the calculated price per unit when 13,800 units are in demand?

• $3.40

• $0.34

• $34.00

• $340.00

According to the demand function, what happens if the price is set at $3.40?

• The price will need to be adjusted

• Only half of the units will be sold

• The demand will decrease

• All 13,800 units will be sold

What is the significance of the demand function in pricing strategy?

• It predicts the number of units that will be sold at a given price

• It sets a fixed price for all units

• It helps determine the cost of production

• It calculates the total profit