Finding the demand function
I don't have a question to "correctly interpret" , but I think the way you are calculating the demand function is correct. The demand curve in an oligopoly can be kinked (bowed out), as this one is. I think it is mathematically accurate to write the function split across the domains, as such:

$Q = \begin{cases} 
700 - P, &amp; 0  \leq P\leq 500 \\
2200 - 4P, &amp; 500&lt; P&lt; 550
\end{cases}$

where I have written quantity as a function of price, and assumed that the quantity is strictly positive.