What is expenditure function, Microeconomics

Assignment Help:

What is Expenditure Function?

The Expenditure Function:

When preferences satisfy the local nonsatiation assumption, in that case v(p, m) will be strictly increasing into m. After that invert the function and resolve for m as a function of the level of utility; which is, given any level of utility, u, determine the minimal amount of income essential to attain utility u at prices p. The function which relates income and utility in this method the inverse of the indirect utility function is termed as the expenditure function and is denoted through e(p, u). Properly, the expenditure function is specified by the given problem:

e(p, u) = min px

that is u(x) > u.

The expenditure function specifies the minimum cost of getting a fixed level of utility.


Related Discussions:- What is expenditure function

Why concept of elasticity is important in economics, Why concept of Elastic...

Why concept of Elasticity is important in economics?  Elasticity is very important concept in economics because it affects the decision of individuals as well as of the whole e

Capacity utilization, discuss ho capacity utilization and product different...

discuss ho capacity utilization and product differentiation affect internal rivalry and entry barriers with the analytical framework of the porter five forces model. use the econom

Markets, under which market structure does the banking sector fall?

under which market structure does the banking sector fall?

Key elements in micro enviroment, what are key elements in micro enviroment...

what are key elements in micro enviroment of red bull

Economic profit in a monopoly 2006 ap exam, is it just assumed that a monop...

is it just assumed that a monopoly graph is showing economic profit instead of accounting profit

Efficiency of a competitive market, The Efficiency of a Competitive Market ...

The Efficiency of a Competitive Market *? When an competitive markets generate an inefficient allocation of the resources or market failure?   1) Externalities Costs

What is joint stock, Q. What is Joint Stock? Joint Stock: A form of bus...

Q. What is Joint Stock? Joint Stock: A form of business in which company's assets are jointly divided among a large number of different individual owners, each of whom owns a s

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd