Econ.vision - Marshallian Demand

Input Utility Function

Input the utility function, e.g., "\log\left(x\right)+\log\left(y\right)”. You do not need to set the utility function equal to any level of U.

Input Budget Line

Input the budget line in the form "P_{x}x+P_{y}y" with P_{x} and P_{y}y as set constants.

Input Total Budget

Input the total budget. The calculator will immediately calculate the Marshallian demand bundle, and display the budget line in blue, the corresponding indifference curve in green, and the bundle in purple.

A Note on Theory: The Tangency Condition and the Feasibility Condition

The graphical solution demonstrates that the Marshallian demand bundle satisfies:
1) The tangency condition: the budget line and indifference curve are tangent at the Marshallian demand bundle — the slope of the budget line (\frac{P_{x}}{P_{y}}, the price ratio) and the slope of the indifference curve (\frac{U_{x}}{U_{y}}, the marginal rate of substitution) are equal to each other
2) The feasibility condition: the Marshallian demand bundle lies on the budget line