Expenditure function
From Wikipedia, the free encyclopedia
In microeconomics, the expenditure function describes the minimum amount of money an individual needs to achieve some level of utility, given a utility function and prices.
Formally, if there is a utility function u that describes preferences over L commodities, the expenditure function
says what amount of money is needed to achieve a utility u * if prices are set by p. This function is defined by
where
is the set of all packages that give utility at least as good as u * .
