How to Find Demand Function from Utility Function

How to Find Demand Function from Utility Functionに取り組みたい方へ、役立つ ガイドラインをご紹介します。

Remember your budget: $P_T T + P_R R = I$. And from step 3, $P_R R = P_T T$. Substitute that in: $P_T T + P_T T = I$, so $2 P_T T = I$. Divide by $2P_T$, and boom: $T = \frac{I}{2P_T}$. That’s your demand function for tacos!

Check it out: if income doubles, you buy twice as many tacos. If price doubles, you buy half as many. Economists call this “rational behavior”—I call it “taco logic 101.” And yes, your demand for ramen will be $R = \frac{I}{2P_R}$. Perfect symmetry. Almost as satisfying as a perfect taco bite.