Given a linear demand function of the form QXd 200 025PX f

Given a linear demand function of the form QXd = 200 - 0.25PX, find the inverse linear demand function.

Solution

Given the demand function

Q_Xd = 200 - 0.25 P_X

We know that the inverse demand function is similar to Average Revenue function P = AR

So the inverse demand function is

P_X = 800 - 4 Q_Xd .