Answer to Question #62575 in Economics of Enterprise for magnus
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
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