Question

Suppose that the demand for a product is given by Q = 25 – 0.25P. The inverse demand is:

a) P= 100 +4Q
b) P= 100 - 49
c) P= 25 -0.259
d) P= 25 - 4Q

Answer 1

The inverse demand equation, obtained by solving the given demand equation Q = 25 - 0.25P for P, is P = 100 - 4Q. This expresses price as a function of quantity demanded.

Step-by-step explanation:

To answer the student's question about the inverse demand equation, we first have to solve the given demand equation for P (price). The student provided the demand equation as Q = 25 - 0.25P. To find the inverse demand, we solve this equation for P. Here's the step-by-step solution:

• Start with the original demand equation: Q = 25 - 0.25P
• Add 0.25P to both sides: 0.25P + Q = 25
• Subtract Q from both sides: 0.25P = 25 - Q
• Finally, divide both sides by 0.25 to isolate P: P = 100 - 4Q

So the correct answer is d) P = 100 - 4Q. This inverse demand shows how the price P can be expressed as a function of the quantity demanded Q.