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A statistical interpretation of a market demand curve for a commodity obeying the law of demand

Author

Listed:
  • Somdeb Lahiri

    (PDEU, India)

Abstract

In this note we provide a statistical interpretation of the Marshallian market demand curve of a commodity that obeys the law of demand and which has a finite and positive level of satiation. A consequence of our approach is that in the context of two goods, we are able to obtain demand functions which are very similar to those obtained by “budget-constrained Cobb–Douglas utility maximization†, but now as a result of a “budget-constrained linear utility maximization†exercise, although our budget constraint is “slightly different†from the one that would be used for the former optimization problem.

Suggested Citation

  • Somdeb Lahiri, 2023. "A statistical interpretation of a market demand curve for a commodity obeying the law of demand," Managerial Economics, AGH University of Science and Technology, Faculty of Management, vol. 24(1), pages 27-38.
    • Handle: RePEc:agh:journl:v:24:y:2023:i:1:p:27-38
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    File URL: https://journals.agh.edu.pl/manage/article/view/5969/2962
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