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Worked-example setupScope and assumptions
- The Linden equations and buyer expansion are stipulated fictional model inputs, not estimates from observed sales.
- The baseline movement changes only the chair's own price; the buyer-expansion comparison changes only the demand intercept while supply remains fixed.
- Product, quality, geography, buyer definition, period, and units remain unchanged across comparisons.
- Period
- One representative fictional week
- Units
- USD per qualifying chair and qualifying chairs per week
- Rounding
- Exact whole-dollar prices and whole-chair model quantities
First comparison: move on one relationship
Baseline demand is Qd = 1,400 - 10P. At $50, quantity demanded is 900 chairs
per week. At $60, it is 800. The chair's own price changed while the demand
relationship stayed fixed, so this is a 100-chair decrease in quantity
demanded, not a decrease in demand.
Second comparison: hold price and change the relationship
The packet then stipulates a larger buyer population and changes the demand intercept to 1,600 while preserving the slope. At the common $60 reference price, the new quantity demanded is 1,000 rather than 800. This is an outward demand shift in the model: buyers would purchase 200 more chairs per week at that same price.
| Comparison | Price basis | Demand function | Quantity demanded |
|---|---|---|---|
| Baseline point | $50 | 1,400 - 10P |
900 |
| Baseline point | 60 | 1,400 - 10P |
800 |
| Buyer expansion | 60 | 1,600 - 10P |
1,000 |
Do not infer the shift from sales alone
The buyer expansion is a supplied scenario, not a causal estimate. In observed data, price, supply, product mix, credit, and buyer composition can all change. The example demonstrates consequences if the demand relationship shifts; it does not prove that population growth caused a real market movement or that the linear function holds outside its teaching domain.
Verified calculation · economics foundations analysis
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- linear markets
- 2 fields
Inspect data
{
"baseline_demand": {
"demand_intercept_quantity": 1400,
"demand_quantity_per_price": 10,
"price_checks": {
"price_50": 50,
"price_60": 60
},
"supply_intercept_quantity": 200,
"supply_quantity_per_price": 10
},
"buyer_expansion": {
"demand_intercept_quantity": 1600,
"demand_quantity_per_price": 10,
"price_checks": {
"reference_price_60": 60
},
"supply_intercept_quantity": 200,
"supply_quantity_per_price": 10
}
}Recomputed result
| Measure | Value |
|---|---|
| baseline demand equilibrium price | 60 |
| baseline demand price 50 quantity demanded | 900 |
| baseline demand price 60 quantity demanded | 800 |
| buyer expansion equilibrium price | 70 |
| buyer expansion reference price 60 quantity demanded | 1,000 |