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The demand curve is derived through the utility maximum principle, emphasizing the importance of perfect markets and rational agents, known as homo oeconomicus. These agents evaluate opportunities against their opportunity costs to maximize benefits within their income constraints. The analysis includes defining key concepts and utilizing tools like the budget line, which illustrates available income, and the indifference curve, which identifies the optimal quantity of goods. The paper highlights the theoretical underpinnings necessary for understanding demand in economic models.
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How can the Demand Curve be derived from the Utility Maximum Principle?, Johann Gross
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- 2014
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