Hicksian Demand

Hicksian demand refers to the quantity of goods a consumer would choose to buy if they wanted to reach a specific level of satisfaction (utility) while minimizing spending. It isolates the effect of price changes on consumption, assuming the consumer adjusts their purchase to maintain the same happiness. Unlike ordinary demand, which considers actual purchasing habits, Hicksian demand focuses on the optimal choices when budgets are adjusted to keep utility constant, helping economists understand how price fluctuations influence consumer behavior independently of income effects.