Content deleted Content added
No edit summary |
No edit summary |
||
Line 3:
In [[economics]], an '''inverse demand function''' is a function that maps the quantity of output supplied to the market price (dependent variable) for that output.
In mathematical terms, if the [[demand curve|demand function]] is f(x), then the inverse demand function is f<sup> -1</sup>(x). This is to say that the inverse demand function is the [[demand curve|demand function]] with the axes switched. This is useful because economists typically place Price ([[Price|P]]) on the vertical axis and Quantity ([[Quantity|Q]]) on the horizontal axis.
To compute the inverse demand equation simply switch the [[Quantity|Q]] and [[Price|P]] variables in the [[demand curve|demand function]] and solve for Q.
| |||