a. If, in a constrained minimization problem, P A = $10, P B = $10, MB A
Question:
a. If, in a constrained minimization problem, PA = $10, PB = $10, MBA = 600, and MBB = 300 and one unit of B is taken away, how many units of A must be added to keep benefits constant?
b. If the substitution in part a continues to equilibrium, what will be the equilibrium relation between MBA and MBB?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
a To keep the benefits constant the goods must be substituted based on the marginal rate of substitu...View the full answer
Related Book For 
Managerial Economics Foundations of Business Analysis and Strategy
ISBN: 978-0078021909
12th edition
Authors: Christopher Thomas, S. Charles Maurice
Question Posted:
