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Line 8: The inverse demand function is the same as the average revenue function, since P = AR.<ref>Chiang & Wainwright, Fundamental Methods of Mathematical Economics 4th ed. Page 172. McGraw-Hill 2005</ref> To compute the inverse demand function, simply solve for P from the demand function. For example, if the demand function has the form Q = 240 - 2P then the inverse demand function would be P = 120 +- 0.5Q.<ref>Samuelson & Marks, Managerial Economics 4th ed. (Wiley 2003)</ref> ==Applications==

Inverse demand function: Difference between revisions