George spends all his pocket money on candies and potato chips every month. The last bag of

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George spends all his pocket money on candies and potato chips every month. The last bag of candies George consumes yields $80 in marginal benefits, whereas the last bag of potato chips yields $30. George’s satisfaction is maximized under which of the following situations?

Explain your answer.

a. The price of candies is $12 per bag, and the price of potato chips is $3 per bag.

b. The price of candies is $10 per bag, and the price of potato chips is $5 per bag.

c. The price of candies is $16 per bag, and the price of potato chips is $6 per bag.

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Economics

ISBN: 287201

6th Global Edition

Authors: Daron Acemoglu, David Laibson, John A. List

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