<p>This demand function is just normalized to unit. If you are not interested in the concrete quantity of your demand function, but you are interested how the demand of the specific market is distributed between firms, you can use this simple demand function.</p>

<p>For example, you can consider a normalized demand function in a Bertrand's game. Let's assume the firms are symmetric, there's no capacity constraints. The demand ($D(p_i,p_{-i})$) of firm $i$ is the following:</p>

<p>$$ D(p_i,p_{-i}) =
\begin{cases}
    0       &amp; \quad \text{if } p_i &gt; p_{-i} \\
    1/2  &amp; \quad \text{if } p_i = p_{-i} \\
    1  &amp; \quad \text{if } p_i &lt; p_{-i} \\
  \end{cases} $$ </p>

CC BY-SA 3.0
2016-07-03T19:26:25.297Z
Admins, how can I write $D(p_i, p_{-i})$ beside the array?
Übel Yildmar
CC BY-SA 3.0
2016-07-04T02:59:26.863Z
Just edited and implemented that exact change.
snoram
CC BY-SA 3.0
2016-07-03T06:52:48.913Z
2016-07-04T09:33:42.247Z
2016-07-04T09:33:42.247Z
Übel Yildmar
<p>In my text book, many theories are explained using ad unitary demand curve: a consumer can buy 1 quantity of the product, or none.
The example of the demand function is $ p(q) = 1- q $</p>

<p>but that means if I want to sell one quantity the price should be 0?
I did simply p(q=1) = 1- 1 = 0</p>

<p>What does it mean? </p>

CC BY-SA 3.0
2016-07-02T22:57:43.000Z
I think you are mixing up concepts. But to try to address your main question: If your demand function is $p = 1-q$ then that does not mean $q=1$ means one unit, it could mean one billion or 550.
snoram
CC BY-SA 3.0
2016-07-02T23:13:45.537Z
How q =1 could mean 550 quantities ?
sparkle
CC BY-SA 3.0
2016-07-02T23:25:32.887Z
Yes. In that case one unit is $q = \frac{1}{550} = 0.0018$. What is important is the relationship between price and quantity.
snoram
<supply-and-demand>
Unitary demand curve: p = 1 - q
sparkle
# Unitary demand curve: p = 1 - q

(Asked by: username_0 on 2016-07-02)

In my text book, many theories are explained using ad unitary demand curve: a consumer can buy 1 quantity of the product, or none.
The example of the demand function is $ p(q) = 1- q $

but that means if I want to sell one quantity the price should be 0?
I did simply p(q=1) = 1- 1 = 0

What does it mean?

**Tags:** supply-and-demand

> **Comments:**
> **username_1**: I think you are mixing up concepts. But to try to address your main question: If your demand function is $p = 1-q$ then that does not mean $q=1$ means one unit, it could mean one billion or 550.  
> **username_0**: How q =1 could mean 550 quantities ?  
> **username_1**: Yes. In that case one unit is $q = \frac{1}{550} = 0.0018$. What is important is the relationship between price and quantity.  

---

## 1 answers

### Answer by username_2 on 2016-07-03. Score: 3 | Accepted answer

This demand function is just normalized to unit. If you are not interested in the concrete quantity of your demand function, but you are interested how the demand of the specific market is distributed between firms, you can use this simple demand function.

For example, you can consider a normalized demand function in a Bertrand's game. Let's assume the firms are symmetric, there's no capacity constraints. The demand ($D(p\_i,p\_{-i})$) of firm $i$ is the following:

$$ D(p\_i,p\_{-i}) =
\begin{cases}
0 & \quad \text{if } p\_i > p\_{-i} \\
1/2 & \quad \text{if } p\_i = p\_{-i} \\
1 & \quad \text{if } p\_i < p\_{-i} \\
\end{cases} $$

> **Comments:**
> **username_2**: Admins, how can I write $D(p_i, p_{-i})$ beside the array?  
> **username_1**: Just edited and implemented that exact change.  

---

