Consider 2 consumers with identical income M and utility function U=x*y

where x is the amount of restaurant good consumed and y is the amount of

any other good consumed. The unit prices of the goods are given. The consumers have two alternative plans to meet the bill. Plan A: they eat together at the restaurant and each pays his own bill. Plan B: they eat together at the restaurant and each pays one-half of the total restaurant bill.

a) Find the equilibrium consumption under Plan A.

b) Find the equilibrium consumption under Plan B.

c) Explain your answer if the equilibrium answer in case A differs from that

in case B.