Description
initialExpenditure = initialShare*expenditure; shareContribution = price*suppliedCompensatedQuantityChange/expenditure.
A budget constraint links prices, quantities and a monetary resource. An axis intercept, residual or local share contribution describes one aspect of that constraint and does not independently solve preferences or determine actual affordability.
initialExpenditure = initialShare*expenditure; shareContribution = price*suppliedCompensatedQuantityChange/expenditure.
When to use this tool
Use Budget Share Compensated Change when checking one supplied basket, budget-line or resource-allocation term.
How to use the tool and how it works
- Enter initialShare, suppliedCompensatedQuantityChange, price, expenditure. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read shareContribution, initialExpenditure. Use the output convention below.
Require initialShare in [0,1] and positive expenditure. initialExpenditure = initialShare*expenditure; shareContribution = price*suppliedCompensatedQuantityChange/expenditure.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| initialShare | Initial Share | Required. Finite number; minimum 0; maximum 1. |
| suppliedCompensatedQuantityChange | Supplied Compensated Quantity Change | Required. Finite number. |
| price | Price | Required. Finite number. |
| expenditure | Expenditure | Required. Finite number; strictly above 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| shareContribution | Share Contribution | Required. Finite number. |
| initialExpenditure | Initial Expenditure | Required. Finite number. |
{
"input": {
"initialShare": 0.3,
"suppliedCompensatedQuantityChange": -2,
"price": 5,
"expenditure": 100
},
"output": {
"shareContribution": -0.1,
"initialExpenditure": 30
}
}Limitations and assumptions
- This is only the fixed-price quantity contribution to a budget share. It does not include price or total-expenditure changes or independently compute compensated demand.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use the complete feasible set and an appropriate choice model for optimization, rationing or welfare questions.
References
Similar or alternative tools
- Budget Line Axis Intercept
intercept = budget/price, the maximum single-good quantity if all budget is spent at that price.
- Budget Frontier Single Price Derivative
secondQuantity = (income-firstPrice*firstQuantity)/secondPrice; priceDerivative = -firstQuantity/secondPrice.