Indirect Utility

Bruce C. Dieffenbach ()
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Bruce C. Dieffenbach: Independent author

Chapter 46 in Conjugate Duality in Economic Analysis, 2026, pp 351-356 from Springer

Abstract: Abstract By the Marshall decomposition applied to a consumer, indirect utility—the maximum utility for given income and price—is equivalent to utility; either suffices to determine the other. Consumer demand maximizes utility subject to the budget constraint set by price and income. Alternatively, see this same condition as constraining price for a given quantity and income, such that spending is less than or equal to income. A parallelogram theorem holds: quantity maximizes utility for a given price if and only if this price minimizes indirect utility for this quantity. Maximum utility equals minimum indirect utility. A parallelogram furnishes a geometric interpretation.

Date: 2026
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DOI: 10.1007/978-3-032-21396-9_46

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