If we rule out perverse demand (price-quantity) relationship, as is shown by the Giffen example, we can speak of the inverse demand function. Such a demand function treats price as a function of quantity, i.e., what p1 would have to be, at each level of demand of x1 in order for the consumer to choose […]
The Inverse Demand Function (With Diagram) | Microeconomics
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Properties of Demand Function | Microeconomics
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Here is a detailed discussion on ordinary and compensated demand function. 1. Ordinary Demand Function: A consumer’s ordinary demand function (called a Marshallian demand function) shows the quantity of a commodity that he will demand as a function of market prices and his fixed income. Demand functions can be derived from the utility-maximising behaviour of […]
Elasticity of Demand: Price, Income and Cross | Microeconomics
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Elasticity of demand is of three types – price, income and cross. 1. Price Elasticity of Demand: Price elasticity of demand is defined as the degree of responsiveness of the quantity demanded of a commodity to a certain change in its own price, ceteris paribus. It is expressed as follows: Price elasticity of demand […]