Nothing. The supply function is separate from the demand function. If supply goes up, equilibrium price goes down (along the demand curve) and equilibrium quantity goes up (also along the demand curve). It is incorrect to say that when supply goes up that demand increases, because the demand function does not change; quantity demanded (as dictated by equilibrium) will indeed rise, but this is not the same as an increase in demand.
A "demand curve" is Price vs. Quantity, holding all else constant; whereas, a "demand function" is Quantity vs. Price, holding all else constant. If you can imagine a graph, with the y-axis being Price, and the x-axis being Quantity, and you were to plot price/quantity data or, perhaps, even a function onto this graph, then that would be a "demand curve". If you did something similar but, this time, the y-axis was Quantity, and the…
Given the demand curve that is a rectangular hyperbola with a demand function of the form Q equals 1 over P Show that the point of elestacity will be unitary throughout the demand curve?
Assuming that the given demand curve is a rectangular hyperbola, total expenditure (i.e. rectangular area or Q*P) is the same for each point on the length of the curve. Next we use the demand function to determine the total expenditure value as Q=1/P=>Q*P=1, and we have consequently a demand curve of unitary elasticity.
In economics, the demand curve is a mathematical function which related the relative demand of a product to some factor, usually price. The curve is often plotted against the supply curve, so that the values of the demand curve, the actual demand at a certain price, can be meaningfully compared to the supply at that same price.
Price elasticity of demand is equal to the instantaneous slope of the demand curve, or the slope of the tangent line at any point on the demand curve. So if the demand curve is represented by a straight downward sloping line, then yes, price elasticity of demand is equal to the slope of the demand curve. Otherwise, the slope at any point on the curve is changing, and you can find the it by taking…
It is a function of the form D = ax + b where a and b are some constants and x is a variable which is linearly related to the demand. x could be the price of the goods in question, or be the price of a complementary good, a substitute, or it could be income, or time. Also, a linear relationship does not mean a causal relationship.
demand function -- a behavioral relationship between quantity consumed and a person's maximum willingness to pay for incremental increases in quantity. It is usually an inverse relationship where at higher (lower) prices, less (more) quantity is consumed. Other factors which influence willingness-to-pay are income, tastes and preferences, and price of substitutes.
Here are two variables Demand and Price, whereas Price is Independent variable & Demand is dependent variable, i.e. if price of something changes the demand will also be affected. Now simple Differential Equation is d (Demand)= constant d (Price) But keep in mind that Price is a function not a simple variable.