What is hicksian demand function, Microeconomics

Assignment Help:

What is Hicksian demand function?

Hicksian Demand Function:

The solution of expenditure function that is the function of (p, u) is denoted by h(p, u) and termed as the Hicksian demand function. This demand function tells us what consumption bundle attains a target level of utility and minimizes total expenditure. This function is sometimes termed as a compensated demand function. That terminology comes from seeing the demand function as being constructed through varying prices and income in order to keep the consumer at a fixed level of utility. Therefore, the income changes are arranged to “compensate” for the price variations. Hicksian demand functions are not directly observable from they depend onto utility that is not directly observable.

Demand functions defined as a function of prices and income are observable; while we want to emphasize the dissimilarity between the Hicksian demand function and the common demand function.


Related Discussions:- What is hicksian demand function

What caused the productivity slowdown, What caused the productivity slowdow...

What caused the productivity slowdown?  Observers have pointed to 4 factors--Oil prices, baby boom, increased problems of economic measurement and environmental protection expe

Microeconomics, Ways in which the markets fail and discuss why government i...

Ways in which the markets fail and discuss why government intervention is justified and whether government intervention works or not.

Market structures, illustrate and discuss the implications of various marke...

illustrate and discuss the implications of various markets structures(competitive and non-competitive) for price dertimation

Choices , why is choice inevitable in the understanding of economics scienc...

why is choice inevitable in the understanding of economics science?

Tech, impact of computer technology on nigerian economy

impact of computer technology on nigerian economy

Monopsony, what are the advantages of monopsony?

what are the advantages of monopsony?

Explain how the price system eliminates a shortage, Explain how the price s...

Explain how the price system eliminates a shortage. A deficiency means that quantity demanded is greater as compared to quantity supplied. This will lead to upward pressure on pr

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