Quote:
Originally Posted by waqas izhar
Thank you sir but there is a glitch. With this method I will only get the optimum level of consumption. How do I incorporate substitution and income effect.
Regards
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I just took note of you asking for the income effect.
It's going to follow the same process, only to keep INCOME (which you will get in terms of utility and respective prices) constant in place of Utility. In other words, we will be working for the ordinary demand function in a similar fashion to this which was a compensated demand function.