Definition
Expenditure function is the minimal amount spent in EMP, denoted as e(p, u):
It is analogous to the indirect utility function in UMP.
Proposition
- e(p, u) is homogeneous of degree 1 in p
- strictly increasing in u and non-decreasing in
for all l (l: a kind of commodity among all L commodities) - concave in p
- continuous in p and u