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Editing formula for finding Marshallian Demand with Cobb-Douglas utility function
Suppose a utility function $u=x_1^ax_2^b$ with $a+b=1$. The following formula finds the values for $x$:
$x_1 = \frac{am}{p_1}\\
x_2 = \frac{bm}{p_2}$
But what if the utility function looks like $u=...
- 245
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Marshallian Demand for Cobb-Douglas
When trying maximize the utility having a cobb-douglas utility function $u=x_1^ax_2^b$, with $a+b = 1$, I found the following formulas (Wikipedia: Marshallian Demand):
$x_1 = \frac{am}{p_1}\\
x_2 = \...
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