Total expenditure

Summary

Total expenditure

  • Cost of bundle \(\left( x_1,x_2 \right)\) : \(p_1x_1+p_2x_2\)
  • \(TE\left( x_1,x_2 \right)=p_1x_1+p_2x_2\) (for total expenditure)
  • Example:
    • \(p_1=2\) and \(p_2=3\)
    • \(TE\left( x_1,x_2 \right)=2x_1+3x_2\)