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Deriving Marshallian demand function...?
I understand that the numerator is Income i.e. 50w+(Px^2/4w), what I don't understand is how the denominator is derived? I see that is always related to the price of a good or several goods (Px, Py). But how?
2 Answers
- 1 decade agoFavorite Answer
Honestly i tried learning Marginalist functions and i realized that theyre not helpful anymore. They assume that every consumer weighs the benefits with the price on every product when in reality advertising and speculative price (what others think you payed for it) have more to do with it. You should try learning keynesian and monetarist theories bc in todays reality, marginalists wont help you nearly as much as it used to help people.
- Anonymous5 years ago
The first thing you do to figure out the inverse of a function is switch the y and x. For example, your equation would now look like x=y-5. Then you must isolate the y again. Adding 5 will leave the y alone and make the inverse equation x+5=y. You can do this with any other equation you need to find the inverse of. :]