(Answered) prove cobb douglas utility function has income elasticity of demand oneprove cobb douglas utility…

➤ How do you derive the Marshallian demand and compute the elasticity?
Set up the Lagrangian for max U subject to p·x = m and take first-order conditions: α_i/x_i = λ p_i. Solve to get x_i = α_i/(λ p_i) and use the budget constraint to find λ = (Σα_j)/m. Substituting yields x_i proportional to m/p_i, so ∂x_i/∂m = x_i/m and elasticity equals one.