Inverse demand function: Difference between revisions

Revision as of 16:20, 21 September 2009

Revision as of 00:26, 23 September 2009

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In [[economics]], an '''inverse demand function''' is a function that maps the quantity of output demanded to the market price (dependent variable) for that output. Quantity demanded, Q, is a function of price; the inverse demand function treats price as a function of quantity demanded, and is also called the price function{{cnCitation needed|date=September 2009}}.

In mathematical terms, if the [[demand curve|demand function]] is f(x), then the inverse demand function is f^-1(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 ('''P''') on the vertical axis and quantity ('''Q''') on the horizontal axis.

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