Substitution and Income Effect (With Equations)| Consumer
In this article we will discuss about the substitution and income effect on the budget of a consumer. Let’s assume that the ordinal utility function of the consumer is U = f(q1,q2) [eq. (6.1)] where q1 and q2 are the quantities of the goods Q1 and Q2, respectively, and U is the ordinal utility number. The consumer's budget constraint can [...]