Inverse demand function

This is an old revision of this page, as edited by 24.68.150.66 (talk) at 07:21, 6 November 2006 (Fixed a few typos and clarified the scales and units of each axis). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

In economics, an inverse demand function is a function that compares the quantity of output to the market price for that output.

In mathematical terms, if the demand function is f(x), then the inverse demand function is 1/f(x). This is to say that the inverse demand function is the demand function with the axes switched. On a normal demand curve, the vertical axis shows price per unit and the horizontal axis shows units of quantity demanded. On an inverse demand curve, the vertical axis shows units of quantity demanded and the horizontal axis shows price per unit.