Suppose the daily demand for Coke and Pepsi in a small city are given by and where Q_C and Q_P are the number of cans Coke and Pepsi sell,respectively,in thousands per day.P_C and P_P are the prices of a can of Coke and Pepsi,respectively,measured in dollars.The marginal cost is $0.45 per can.What is Pepsi's inverse demand function?

Question

Quizplus · Accepted Answer

The inverse demand function is given by solving for P in the demand equation. Therefore, we have: Q_P = -0.5P + 22 and P_C = -0.6P + 24 Setting the two equations equal to each other, we have: -0.5P + 22 = -0.6P + 24 0.1P = 2 P = 20 Therefore, the inverse demand function for Pepsi is: P_P = -0.6P + 24 = -0.6(20) + 24 = 12 So, the answer is (A).

Suppose the Daily Demand for Coke and Pepsi in a Small