Inverse demand function: Difference between revisions

Content deleted Content added
top: rewrote to explain the non-obvious relationship between demand curve and (inverse) demand function
m top: Fixing style/layout errors
Line 2:
 
Historically, the economists first expressed the price of a good as a function of demand (holding the other economic variables, like income, constant), and plotted the price-demand relationship with demand on the x (horizontal) axis (the [[demand curve]]). Later the additional variables, like prices of other goods, came into analysis, and it became more convenient to express the demand as a [[multivariate function]] (the '''demand function'''):
<math>{demand} = f({price}, {income}, ...)</math>, so the original demand curve now depicts the ''inverse'' demand function <math>P{price} = f^{-1}(Q{demand})</math> of price with extra variables fixed.<ref>{{cite web |last1=Karaivanov |first1=Alexander |title=The demand function and the demand curve |url=https://www.sfu.ca/~akaraiva/demfun.pdf |website=sfu.ca |publisher=[[Simon Fraser University]] |access-date=29 August 2023}}</ref>
 
==Definition==