Me-Tube manufactures bodysuits. The demand function for their suits is x = f (p) = 650 - 2 p The demand f (p) is the number of suits that can be sold at a price of p dollars. a. What is the rate of change in demand at a price of $ 200.00 per suit?

Answer and Explanation:

f (p) function denotes the number of suits sold for a price p in dollars.

At Price = $200, the number of suits sold is:

f (p) = 650 - 2 (200) = 250 suits

Lets see how much at price = p' = 250 does it sell,

f (p) ' = 650 - 2 (250) = 150

Rate of change formula:

f (p) ' - f (p) / p' - p = 250 - 200 / 150 - 250 = - 0.5

We see that as the price increases, the number of suits sold decreases. It can also be credited by the fact that the rate of change is in negative which implies an inverse relationship between price and quantity.