inverse supply function

Definition

Economics

  • A function representing the relationship between quantity supplied and price, specified for convenience with price as a function of quantity instead of the more usual quantity as a function of price. Thus if a conventional supply function is QS = a + bP, then the inverse supply function is QS = a + bP, then the inverse supply function is P = QS/b - (a/b). Especially appropriate if supply is infinitely elastic (i.e., constant cost).
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