# Show that the utility function is homothetic if and only if all demand functions are...

## Question:

Show that the utility function is homothetic if and only if all demand functions are multiplicatively separable in price and income and of the form {eq}x(p,y) = \phi(y)x(p,1). {/eq}

## Utility Function:

In economics, the aforementioned term is associated with the consumer preferences for products and services wherein consumers will prefer a bundle of products and services that give them a higher level of satisfaction.

## Answer and Explanation: 1

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View this answerConsider the given function;

{eq}x (p, y) = \phi (y) x (p, 1) {/eq}

We know that the given function will become homothetic if the ratio of the...

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Chapter 3 / Lesson 9Learn about consumer preferences in economics and understand the importance of the consumer choice theory - study examples of consumer preference assumptions.

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