Theoretical Derivation of a Market Demand Function for Business Simulators

Abstract

A theoretical derivation of a market demand function is presented. The derivation begins with the principle of utility maximization and yields a function, which conforms to the law of demand, the law of diminishing returns, and the concept of ordinal utility. The derived function should be suitable for a wide variety of applications. The derivation process serves as a proof for the market demand function derived, and it highlights some of the information that ought to be included in published computerized business simulators.