Cover Image
QR Code

The Demand Curves from a Quadratic Utility Indicator.

Whereas Houthakker's capacity method in quadratic programming is an ideal method to derive the quantity-income Engel curves, this note shows that his method, with a few modifications, can be used also in the derivation of the quantity-price demand curves. The paper is self-contained if the statement...

Full description

Published in:Review of Economic Studies Vol. 35; no. 2; pp. 209 - 225
Main Author: Wegge, L.L.
Format: Article
Published: Oxford University Press / USA Apr68
Subjects:
Consumer behavior
Demand function
Quadratic programming
Supply & demand
Capacity theory (Mathematics)
Utility theory
Consumption (Economics)
Econometric models
Economics education
Online Access:View this record in EBSCOhost
Summary:Whereas Houthakker's capacity method in quadratic programming is an ideal method to derive the quantity-income Engel curves, this note shows that his method, with a few modifications, can be used also in the derivation of the quantity-price demand curves. The paper is self-contained if the statement of the Kuhn-Tucker-Lagrange conditions and the mnemonic property of the condensed pivotal method may be assumed to be proved. The direct purpose of this note is to set and solve an exercise in the theory of consumer's behaviour.