Marshallian Demand

Objectives

The objective here is to clarify the derivation of an individual consumer’s Marshallian demand function in the case of two goods. Being the solution to the individual’s utility maximisation problem given his or her income, the prices of both goods and the individual’s utility function, the Marshallian demand function plots the quantity the individual demands of a particular good as a function of its price. Since the individual consumer’s nominal income is not adjusted to compensate for changes in prices, Marshallian demand is also coined uncompensated demand.