New answers tagged consumer-theory
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Showing UMP and EMP do not exhibit duality if the assumption of local non-satiation is absent
A counterexample would work as well.
Consider the utility function $U(x) = 0$, and the budget constraint $1 \cdot x \leq 1$. The solution $x^* = 1$ is feasible and maximizes utility, but it does not ...
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Marshallian demand for x^2+y^2
Observe that the points of tangency of the indifference curve and the budget line are not optimal, as these points lie on a lower indifference curve in all three cases compared to the indifference ...
- 8,208
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Accepted
Marshallian demand for x^2+y^2
You need to be careful. You can apply the Lagrangian to your problem, but the solution you will obtain will not be a maximum but instead a minimum. The reason is that your objective function $x^2 + y^...
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Change in Hicksian Demand of an Inferior Good when changing Utility
For the good in question, let $d^m(p,m)$ denote the Marshallian demand and let $d^h(p,u)$ denote the Hicksian demand, where $p$ is the price vector, $m$ is income, and $u$ is utility. Since the good ...
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Exponential Income Consumption Curve
One example of the utility function that can give $y=x^2$ as income consumption curve is $u(x,y)=\min(x^2,y)$
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Accepted
Reservation price and demand curve
You are asked to find the price (not quantity) that the monopoly would choose to maximize its profit.
If it chooses a price $p>10$, then its profit is zero
If it chooses a price $p=10$, then its ...
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