How to change display setting to default in arch linux

Typically most settings are stored in $XDG_CONFIG_HOME (which defaults to ~/.config). So the most simple (or brutal) way to reset your configuration would be to simply remove this folder. (Warning: Removing this folder also removes the configurations of many other applications so it should be on of your last resorts and not your go-to solution.)

If you want to use a less destructive approach you might want to understand how the MATE desktop environment and many of its and other applications store their settings. Basically they use the GSettings API which provide access to a platform dependent key-value store. On Arch Linux the configuration backend for GSettings is provided by dconf.

Assuming you did not mess around with your dconf configuration the local user database where your local changes are stored should be ~/.config/dconf/user. If you want to review what you have changed from the defaults you can use the command dconf dump / and compare the values with the defaults which are defined in /usr/share/glib-2.0/schemas.

One way to change the settings in the CLI would be to dump the user configuration into a file (e.g. dconf dump /org/mate/ > mate-settings.ini), change the file and then load the file again (e.g. dconf load /org/mate/ < mate-settings.ini).

You can use dconf-editor and gsettings to browse and manage the settings. In your case the latter might be the better option and it is also seemingly the preferred way to change the settings.

To filter the MATE settings you can run gsettings list-recursively | grep mate | grep dpi and find the responsible key-value pair. In your case it should be a line like this:

org.mate.font-rendering dpi 500.0

To reset the value of this key to its default you can run the following command:
gsettings reset org.mate.font-rendering dpi

Or you can set it to a fixed value as shown here.