Question

You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by q = 36 – 4p and c(q) = 124 – 16q + q2.

a. find the inverse demand function for your firm's product.

Answer 1

As given in the item above, the demand function is,

q = 36 – 4p

To determine the inverse function,

Replace every q with p and every p with q and solve for the new q’s as shown below.

p = 36 – 4q

Simplify the equation to determine the value of q.

4q = 36 – p

q = 9 – p/4

Answer: q = 9 – p/4