The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Cost Minimization and Utility Maximization

  • Peter Newman
Reference work entry


Consider the following standard problem in the theory of demand: Find x ≥ 0 so as to max u(x) subject to 〈x, p〉 ≤ ω where 〈x, p〉 is the inner product of the n-dimensional commodity and price vectors, and ω > 0 and u are the consumer’s income and utility function respectively; this problem is here labelled max(p, ω).


Arrow corner Compensated demand Cost function Cost minimization and utility Duality Indirect utility function Linear programming Maximization 

JEL Classifications

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Peter Newman
    • 1
  1. 1.