# Tag Info

### How much do second-hand good purchases affect first-hand demand?

Coase (1972) has a classic treatments of this issue for monopolists selling durable goods. The general idea is that if Alice sells a textbook to Bob, Bob can resell it to Charlie when he is done with ...
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### Two-Stage Utility Maximization Problem

Consider the Wikipedia definition (take from Hal Varian's book) of a quasi-linear utility function $$u(w,x_1,...,x_n) = w + h(x_1,...,x_n),$$ where $h$ is strictly concave. The example in this ...
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### Econ Intuition for Jacobian inverse in demand system

For the 2x2 case being considered, write $$\mathbf{B}=\left[\begin{array}{cc} b_{1,1} & b_{1,2}\\ b_{2,1} & b_{2,2} \end{array}\right].\quad$$ It follows that the element (1,1) in $B^{-1}$ is ...
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### Why can't I find masks for the corona virus?

The supply of masks can't keep up with soaring demand because mask producers have capacity constraints in the short run. See this recent article.
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### What exactly is the demand for money?

When economists talk about "demand for money", they don't mean, "How much wealth do people want to have?" Because yes, presumably the answer to that would be "infinity", ...

### Finding demand functions for an unusual utility function

To provide some real world(ish) interpretation, you could consider the following: Wallace enjoys eating cheese on its own. He doesn't much care for crackers on their own, but he especially loves ...
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### Why is the graph of unitary elastic demand a hyperbola?

The price elasticity of demand is defined as: $$E_P=\frac{dQ}{dP} \frac{P}{Q}$$ Although generally elasticity depends on price there is a special type of functions (isoelastic functions) for which ...
It's true that given the utility function the $y$-good is a normal good, so the question is quite odd. Ignoring this, your calculations are correct, but you could simplify to $y(p_x,p_y,b)=\frac{b}{... 4 votes Accepted ### Deriving a demand curve from a Cobb-Douglas utility If you take the general class of CES utility functions, of which Cobb-Douglas is a special case, you do indeed get a demand function that depends on other prices. Specifically, the CES utility ... 4 votes ### Prove that budget constraint is Lower Hemi Continuos (LHC) One approach could be the following. For a$(p_n,w_n)$in the sequence and$x \in B(p,w)define: $$\alpha_n = 1 \text{ if } p_n x \le w_n$$ and $$\alpha_n = \frac{w_n}{p_n x} \text{ if } p_n x > ... 4 votes ### elasticity from inverse demand I will denote the demand function by Q(p) and the inverse demand function by P(q). Then$$ \forall q: Q(P(q)) = q $$so for any h > 0 and q we have$$ \begin{align*} p & := P(q) \\ p_h &... 4 votes Accepted ### Terminology, is elasticity used as "mean elasticity"? I would not call it average elasticity rather its elasticity at an average price. For example take the first paper about elasticity of oil you cite (that is Cooper, J. C. (2003). Price elasticity of ... 4 votes Accepted ### Walrasian demand with a twist of Leontief function Why don't you just plug in some values forx_1$and$x_2$? Start with something like$x_1=1, x_2=1$and find utility$u(1,1)=1+5*1$. Then increase$x_1$or$x_2$and let$x_1=2, x_2=1$and find ... 4 votes Accepted ### CES utility function in an Edgeworth box There seems to be some confusion in the expression for$x^*_i$in the question that whether$i$is for consumer of for the good. Assuming$i$is for consumer: Let$x^*_i = (x_1^i,x_2^i)'$be the ... 4 votes Accepted ### Finding restrictions on parameters for a demand function Demand is positive, so$A>0$. If$p_1$goes to$\infty$,$x_1$has to go to 0, since$p_1x_1$is bounded by$M$. Thus$\alpha < 0$. If$p_2$goes to 0,$x_1$cannot go to$\infty$, since$p_1x_1$... 4 votes Accepted ### Approaches in demand analysis In general the demand for a certain good (say from a consumer) can be written as a function of the prices of all available goods and the total amount of money that the consumer has available. Take the ... 4 votes Accepted ### Demand curve is same as Marginal Benefit curve? Nuance matters: In the comments under 1muflon1's answer the quote given is The demand curve represents marginal benefit. The vertical distance at each quantity shows the mount consumers are willing ... 4 votes ### Demand for minimum of$4$different goods To provide another answer with less equations: Consider first that the inner utility function$u_1 = \sqrt{x+y}$and$u_2 = z + w\$ are perfect substitutes implying that consumer only buy the cheapest ...
Assuming you mean unit elasticity of demand with respect to price the answer is yes. From the information you have, we can deduce that the demand function is as follows: $$Q^d(p)=10/p$$ (I always ...