How to find the demand function from a utility function?
Understand the Problem
The question is asking how to derive a demand function from a given utility function, which involves concepts from consumer theory in economics. Typically, this involves finding the conditions under which a consumer maximizes their utility subject to their budget constraint, which can be done through methods like the Lagrange multiplier or substitution method.
Answer
Solve the utility maximization problem subject to the budget constraint using the Lagrange method to derive the demand functions.
The final answer is to derive the demand functions, solve the utility maximization problem subject to the budget constraint with the Lagrange method.
Answer for screen readers
The final answer is to derive the demand functions, solve the utility maximization problem subject to the budget constraint with the Lagrange method.
More Information
This method is common in microeconomics to find how consumers' choices depend on changes in prices and income.
Sources
- Demand Function vs. Utility Function - Investopedia - investopedia.com
- Deriving demand function from utility function - economics.stackexchange.com
- Deriving demand functions given utility - Mathematics Stack Exchange - math.stackexchange.com
