What Do We Do in This Chapter? We conduct comparative statics analysis of ordinary demand functions the study of how ordinary demands*(p,,P2,y) and x2*(p1,p2,y) change as prices1,P2 and income y change. Theoretically, nothing new
1 Induction Recall the principle of induction: Principle of Induction. Let P(n) be a predicate. If ·P(0) is true,an for all nE N, P(n) implies P(n+1), then P(n) is true for all nE N As an example let's try to find a simple expression equal to the following sum and then use induction to prove our guess correct 1·2+2·3+3:4+…+n·(mn+1) To help find an equivalent expression, we could try evaluating the sum for some small n and(with the help of a computer) some larger n sum
