If MU a /P a = 100/$35 = MU b /P b = 300/? = MU c /P c = 400/?,the prices of products B and C in consumer equilibrium:A) cannot be determined from the information given.B) are $105 and $140 respectively.C) are $105 and $175 respectively.D) are $100 and $200 respectively.

Question

If MU a /P a  = 100/$35 = MU b /P b  = 300/? = MU c /P c  = 400/?,the prices of products B and C in consumer equilibrium:A)  cannot be determined from the information given.B)  are $105 and $140 respectively.C)  are $105 and $175 respectively.D)  are $100 and $200 respectively.

Amanda Yoder · Accepted Answer

Final Answer : B, Explanation :  In consumer equilibrium, the marginal utility per dollar spent is equal across all goods. Solving 300/? = 100/35 gives ? = $105 for product B. Solving 400/? = 100/35 gives ? = $140 for product C.

If MU_a/P_a = 100/$35 = MU_b/P_b = 300/? = MU_c/P_c = 400/?,the prices of products B and C in consumer equilibrium:

A) cannot be determined from the information given.
B) are $105 and $140 respectively.
C) are $105 and $175 respectively.
D) are $100 and $200 respectively.

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Learning Objectives

Learning Objectives

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If MUa/Pa = 100/$35 = MUb/Pb = 300/? = MUc/Pc = 400/?,the prices of products B and C in consumer equilibrium:A) cannot be determined from the information given.B) are $105 and $140 respectively.C) are $105 and $175 respectively.D) are $100 and $200 respectively.

Definitions

Learning Objectives

Learning Objectives

Related questions

If MU_a/P_a = 100/$35 = MU_b/P_b = 300/? = MU_c/P_c = 400/?,the prices of products B and C in consumer equilibrium:

A) cannot be determined from the information given.
B) are $105 and $140 respectively.
C) are $105 and $175 respectively.
D) are $100 and $200 respectively.