Computing the slope of an inverse linear relationship

   The curve to the right is a demand curve, which tells us the quantity demanded5 for any given price. As we noted earlier, this is a negative or inverse relationship, so the curve slopes downward to the right. It is also a linear relationship so the slope is constant.

   As we saw earlier, we can compute slope by the change in the variable on the vertical axis divided by the change in the variable on the horizontal axis, or by computing the "rise over the run." When P increases from 15 to 30, Q decreases from 36 to 6. The "rise" = 15, while the "run" = -30 so the slope is 15 ÷ -30 = - 1/2.

   This constant, negative slope tells us that quantity demanded will fall by 2 units, for every 1 unit increase in price. So, if price is measured in dollars, an increase in price of 1 dollar will cause quantity demanded to fall by 2 units. This particular relationship can be expressed simply with the equation: Q = 66 - 2P.

5 It's more precise to write "desired quantity demanded," but it is often shortened to "quantity demanded."

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