What is Marshall economy

Demand function

With other influencing variables assumed to be constant, the demand function depicts the reaction of the demanded quantity to the change in the price of a good. If the influencing factors remain the same, the demand function shows the dependency between price and quantity, i.e. the quantity demanded that can be derived from the price change. The function can change its position as well as its inclination. However, this only occurs if other influencing factors change besides the price of the good, e.g. rising income. The demand function is particularly important in the following theories:

1. Demand theory of
a)Marshall's demand function: The Marshall's demand function describes the functional relationship between demanded bundles of goods as a function of goods prices with a constant income of a consumer. The function describes the demand for a good as a function of the price if other influencing factors are constant.
b)Hicks's demand function (also: compensated demand function): Hicks's demand function describes the functional relationship between demanded bundles of goods depending on goods prices with a variation in income, which allows the consumer to maintain a constant level of utility. The function thus describes the demand for a good as a function of its price given the constancy of other influencing factors and the level of benefit.

2. Demand function in the Theory of the company: The company's demand for (production) factors depends on the product prices on the goods markets, the factor markets and the company's organizational and technical knowledge. TheFactor demand function a company specifies the demanded factor input quantities depending on goods and factor prices.