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Suppose We Postulate a Linear Demand Curve Qd=abPQ ^ { d } = a - b P

Question 12

Multiple Choice

Suppose we postulate a linear demand curve Qd=abPQ ^ { d } = a - b P and observe, through supply shifts, two points on the demand curve. At point A, PA = 2 and QdA = 6. At point B, PB = 4 and QdB = 2. The choke price for this demand curve is


A) 10
B) 2
C) 5
D) -2

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