Question
A shifting demand curveA vending machine company has studied the demand for soft drinks sold from machines. On a 70 day consumers in the firm's
"A shifting demand curveA vending machine company has studied the demand for soft drinks sold from machines. On a 70 day consumers in the firm's territory will buy about 2,000 cans at a price of $0.75. For each $0.05 rise in price, the quantity sold falls by 200 cans per day; for each 5 rise in temperature, the quantity sold rises by 150 cans per day. The same relationships hold for decreases in price or temperature. Using this information, draw a set of curves showing the demand for soft drinks on days when the temperature is 60, 70, and 85. Then draw a separate diagram with temperature on the vertical axis and quantity on the horizontal axis. Draw a line representing the relationship between temperature and quantity when the price is $0.75. Next, draw additional temperature-quantity lines for prices of $0.50 and $1.00. Do the two diagrams give the same information? Discuss. (Note: If you have any trouble with this exercise, review the appendix to Chapter 1, "Working with Graphs," especially the section entitled "Packing Three Variables into Two Dimensions.")"
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