Question
We stick with the same goods: Coffee and Sandwiches. The price of Coffee is fixed at PC = 1 for this whole question. Barry's demand
We stick with the same goods: Coffee and Sandwiches. The price of Coffee is fixed at PC = 1 for this whole question. Barry's demand function is given by: S B = MB 6PC 2PS where MB is Barry's income. The usual restriction applies: quantities cannot be negative.
(a) Draw: D1: Barry's individual demand curve for Sandwiches, when his income is MB = 10.
D2: Barry's individual demand curve for Sandwiches, when his income is MB = 9. Label the intercepts of the two demand curves.
For the rest of this question, assume that Barry's income is fixed at MB = 10.
(b) What is Barry's quantity demanded of Sandwiches at a price PS = 3?
(c) What is Barry's quantity demanded of Sandwiches at a price PS = 1?
There are two potential consumers of Sandwiches in this market: Barry and Amelia. Amelia is the consumer from the previous question (same preferences, her income is still $45.) For this Sandwich market, find:
(d) The market quantity demanded at a price PS = 3. (e) The market quantity demanded at a price PS = 1.
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