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Obtain the demand function for X when the utility function is: U(X,Y)=XY When Px, Py and I have no specific numerical value.

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Obtain the demand function for X when the utility function is:
U(X,Y)=XY
When Px, Py and I have no specific numerical value.
Answered Same Day Dec 31, 2021

Solution

David answered on Dec 31 2021
120 Votes
Obtain the demand function for X when the utility function is:
U(X,Y)=XY
When Px, Py and I have no specific numerical value.
Answer:
Budget constraint: PxX + PyY = M …. (1)
Objective function: U(X,Y)=XY
Consumer wants to maximize the objective function subject to (1)
From (1), Y =...
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