A new semester is starting, and new students are encountering Dixit-Stiglitz monopolistic competition for the first time. I’ve updated my introductory guide to its basics by adding the step-by-step derivation of the indirect utility function (and hence the expenditure function).
Feedback from users (or teachers) is appreciated.
My original explanation of the guide is here.
and for your next trick, a full idiot proof derivation of the Melitz model? ** crosses fingers **