Answer to Question #62575 in Economics of Enterprise for magnus
what is the equation for quantity demanded as a function of price
Quantity demanded is a term used in economics to describe the total amount of goods or services demanded at any given point in time. It depends on the price of a good or service in the marketplace, regardless of whether that market is in equilibrium. The quantity demanded function is the amount of goods consumers are willing to buy at each market price. A linear demand function can be plotted using the following equation: Qd = a – b*P, where Qd = quantity demand a = all factors affecting price other than price (e.g. income, fashion) b = slope of the demand curve P = Price of the good.
The inverse demand function can also be written as: P = a –c*Qd a = intercept where price is 0 c = slope of demand curve