Re: Demand function

Posted by shiva on Jun 14, 2017; 8:30am
URL: http://discussion-forum.276.s1.nabble.com/Demand-function-tp7605535p7605572.html

According to my explanation. we will get xy = 1 & wz = 0 in one case, or xy =0 & wz = 1, if you substitute them the budget equation is being satisfied.

(pxX+pyY)xy + (PwW+pzZ)wz =M

in first case, this will become pxX +pyY =M

in second case, the above equation turns to pwW + pzZ =M

that is what I have used even while solving. so it satisfies.