Gorman polar form: Difference between revisions

Revision as of 20:26, 29 August 2023

Revision as of 08:50, 9 November 2023

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:<math>x^i(p,m^i)</math>

The aggregate demand of society is, in general, a function of the price system and the entire distribution of incomes:

:<math>X(p,m^1,\dots,m^n) = \sum_{i=1}^n {x^i(p,m^i)}</math>

To represent the entire society as a single consumer, the aggregate demand must be a function of only the prices and the ''total'' income, regardless of its distribution:

:<math>X(p,m^1,\dots,m^n) = X\left(p, \sum_{i=1}^n {m^i} \right)</math>

Under what conditions is it possible to represent the aggregate demand in this way?