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What is the inverse demand function and consumer surplus?

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The demand curve for product X is given by Qdx = 460 - Px
a) Find the inverse demand curve?
b) How much consumer surplus do consumers receive when Px = $35?
c) How much consumer surplus do consumers receive when Px = $25?
d) In general, what happens to the level of consumer surplus as the price of goods falls?

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Solution:

The demand curve for product X is given by Qdx = 460 - Px

a) Find the inverse demand curve?
Qdx=460-Px

Adding Px both sides, we get
Qdx+Px=460

Adding -Qdx both sides, we get
Px=460-Qdx

Inverse demand curve ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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