Answer:

Daily Demand Function

The daily demand function for a product is given by Q=1,010−2P, where Q stands for the quantity demanded and P stands for the price. This equation shows that as the price of a product increases, the quantity demanded decreases.

The Relationship between Price and Quantity Demanded

The relationship between the price of a product and the quantity demanded is an inverse relationship. This means that as the price increases, the quantity demanded decreases. This is because when the price of a product increases, people tend to purchase less of that product as it is more expensive.

Price Elasticity of Demand

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. The higher the price elasticity of demand, the more sensitive consumers are to changes in price. Therefore, if the price elasticity of demand is high, then a small change in price can lead to a large change in quantity demanded.

Elasticity Example

For example, if the price of a product increases from $10 to $20, the quantity demanded of that product may decrease from 50 to 25. This would indicate that the price elasticity of demand is high, as a small change in price has led to a large change in quantity demanded.

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