Draw the demand curve and price offer curve


Assume that Alex and Ben both have $40 only each month to spend on their snack. There are only ice cream and jerky they could buy from WholeFood Market in that world. Both goods are divisible. Let X be the quantity of ice cream and Y be the quantity of jerky. In the winter, assume that Alex's utility function is given as U(x, y) = min{4x, y}. And Ben's utility function is U(x, y) = min{x, y}. Let the price of jerky is set to be $4 as a numeraire.

(i) First, draw the price offer curve for both Alex and Ben. And then draw the demand curve for both Alex and Ben. Lastly draw the market demand assuming Alex and Ben are the only two consumers in that market.

Request for Solution File

Ask an Expert for Answer!!
Microeconomics: Draw the demand curve and price offer curve
Reference No:- TGS068543

Expected delivery within 24 Hours