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3. Assume Meric buys two goods, Pizza (P) and Beer (B), with the utility function U = PB. Meric has an income of $160.
3. Assume Meric buys two goods, Pizza (P) and Beer (B), with the utility function U = PB. Meric has an income of $160. The price of pizza is $8 and the price of beer is $10. a. Find Meric's optimum or utility maximizing bundle. b. Now the price of pizza is $10. Calculate the compensation variation, CV (New Price, Old Utility) and the equivalent variation, EV (Old Price, New Utility) Shortcut 4
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Operations Management Creating Value Along the Supply Chain
Authors: Roberta S. Russell, Bernard W. Taylor
7th Edition
9781118139523, 0470525908, 1118139526, 978-0470525906
