A charity is considering operating a lemonade venture for the summer. The assumption is that they can
Question:
A charity is considering operating a lemonade venture for the summer. The assumption is that they can sell up to 9,000 units of lemonade at a price of $3.00. In addition, it is assumed that if lemonade is sold for $4.00 that sales would decline to 6,500 units. Consider a simple demand curve for the lemonade venture.
To develop a demand curve from these estimates, it is assumed that the relationship between price and quantity is linear, meaning that the change in quantity will be proportional to the change in price. Graphically, you can infer this relationship by plotting the two price-quantity pairs on a graph and connecting them with a straight line. Using intermediate algebra, you can derive an equation for the linear demand curve P=6.6-(-0.0004Q)
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher