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Assume the price of bottled water is $3, and the price of Unit X is $6. Dana spends her entire budget of $30.

(i) Explain why Dana does not maximize her benefit (Utility) when she purchases 2 bottles of water and 4 units of good X. Use marginal analysis to explain.
(ii) What are the optimal quantity of water and X?
(iii) Price of Good X falls to $3, calculate Dana's cross price elasticity.
Complements or Substitutes?

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