Question: Consider the Slutsky equation: x 1 = x 1 s + x 1 n x 1 (p' 1 , m) x 1 (p 1 ,

Consider the Slutsky equation:

x1= x1s + x1n

x1 (p'1, m) x1 (p1, m) = [x1 (p'1, m') x1 (p1, m)] + [x1 (p'1 , m) x1 (p'1 , m' )]

What condition would be necessary with regards to this equation for a consumer to have a perfectly vertical demand curve?

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