Demand set

A demand set is a model of the most-preferred bundle of goods an agent can afford. The set is a function of the preference relation for this agent, the prices of goods, and the agent's endowment. Assuming the agent cannot have a negative quantity of any good, the demand set can be characterized this way: Define L as the number of goods the agent might receive an allocation of. An allocation to the agent is an element of the space \mathbb{R}_+^L ; that is, the space of nonnegative real vectors of dimension L . Define \succeq_p as a weak preference relation over goods; that is, x \succeq_p x' states that the allocation vector x is weakly preferred to x' . Let e be a vector representing the quantities of the agent's endowment of each possible good, and p be a vector of prices for those goods. Let D(\succeq_p,p,e) denote the demand set. Then: D(\succeq_p,p,e) := \{x: p_x \leq p_e ~~~and~~~ p_{x'}\leq p_e \implies x'\preceq_p x \} .

A demand set is a model of the most-preferred bundle of goods an agent can afford. The set is a function of the preference relation for this agent, the prices of goods, and the agent's endowment. Assuming the agent cannot have a negative quantity of any good, the demand set can be characterized this way: Define L as the number of goods the agent might receive an allocation of. An allocation to the agent is an element of the space \mathbb{R}_+^L ; that is, the space of nonnegative real vectors of dimension L . Define \succeq_p as a weak preference relation over goods; that is, x \succeq_p x' states that the allocation vector x is weakly preferred to x' . Let e be a vector representing the quantities of the agent's endowment of each possible good, and p be a vector of prices for those goods. Let D(\succeq_p,p,e) denote the demand set. Then: D(\succeq_p,p,e) := \{x: p_x \leq p_e ~~~and~~~ p_{x'}\leq p_e \implies x'\preceq_p x \} . ==See also== Demand Economics ==External links== http://economics.about.com/library/glossary/bldef-demand-set.htm?terms=Demand+Set. .

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