shephard's lemma shephard’s lemma is a major result in microeconomics having applications in...
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Shephards LemmaShephards lemma states that if indifference curves of the expenditure or cost function are convex, then the cost minimizing point of a given good (X) with price (PX) is unique. The idea is that a consumer will buy a unique ideal amount of each item to minimize the price for obtaining a certain level of utility given the price of goods in the market. It was named after Ronald Shephard who gave a proof using the distance formula in a paper published in 1953, although it was already used by John Hicks (1939) and Paul Samuelson (1947).Sources: Wikipedia, http://dictionary.sensagent/shephards+lemma/en-en/
Shephards LemmaShephards lemma gives a precise formulation for the demand for each good in the market with respect to that level of utility and those prices: the derivative of the expenditure function E(PX, PY, U) with respect to that price.