Question

Concept and importance of indirevt utility function

Answer 1

Another important property of the indirect utility function is that it is degree-zero homogeneous function, meaning that if prices (p) and income (m) are both multiplied by the same constant the optimal does not change (it has no impact). ... Last, but not least, the indirect utility function is also quasi-convex in price.

Answer 2

Explanation:

In economics, a consumer's indirect utility function gives the consumer's maximal attainable utility when faced with a vector of goods prices and an amount of income. . It reflects both the consumer's preferences and market conditions..