Demand Function in Math

In the business world, known as the law of the economy, that is, if the price of a good thing rises, the demand for the goods decreases, whereas if the price of a goods falls, the demand for the goods rises.

Mathematically, the price of goods is a function of demand. The simplest query function is the linear demand function with the general form of the query function as follows:

Formula of Demand Function in Math

P = Po + mx

Information :
P = Unit price per unit
Po = The highest price of goods when x = 0 (P > 0)
x = Number of goods (x > = 0)
m = The function gradient with a is always negative (m < 0)
The demand curve is always in the first quadrant and down from the bottom to the bottom right.

Example of Demand Function

The highest price on the demand function of an item is $8,000. If at the time the price is $6,000 the requested item is 500 units, determine the linear demand function and paint the demand curve!

Answer :
P = $6,000
Po = $8,000
x = 500 units

P = Po + mx
$6,000 = $8,000 + 500m
$6,000 - $8,000 = $8,000 - $8,000 + 500m
-$2,000 = 500m
-$2,000/500 = 500m/500
-4 = m

So the Demand function is P = -4x + 8000

Using the principle of painting a linear function, the P = -4x + 8000 curve can be illustrated as follows: