Linear Demand Equation Calculator

Problem → model → reason → result

What problem does this model solve?

Derive a linear demand equation from two observed price-and-quantity points and predict demand at another price.

Why does the model apply?

The two observations define a straight-line demand curve. The model assumes other demand conditions stay constant between and beyond those points.

What assumptions does it make?

The variables must describe the same market, firm, period or decision context and use consistent units. Any behavioural condition implied by the formula—such as other factors remaining unchanged—must be reasonable for the question being asked.

Formula

Qd = a − bP; b = −ΔQ ÷ ΔP; a = Q + bP

Calculation and working

The calculator substitutes your inputs locally and displays the numerical result. Change one input at a time to test which relationship drives the result.

What does the result mean?

Interpret the result in the economic context named above, including its sign, magnitude, units and time period. A calculated relationship is not by itself evidence that one variable caused another.

Worked example

If quantity falls from 100 to 80 when price rises from $10 to $12, the equation is Qd = 200 − 10P. At $15, predicted demand is 50 units.

When does this model not apply?

Do not use the result when the input definitions, units or formula assumptions do not match the real situation. This is an educational model, not financial, investment, tax or policy advice; verify material decisions against primary data and professional guidance.