Is better off or worse off after the price change


Antonio buys 8 new college textbooks during his first year at school at a cost of $50 each. Assume that he buys only new books. Used books cost only $40 each. When the bookstore announces that there will be a 20-percent price increase in new texts and a 10-percent increase in used texts for the coming year, Antonio's father offers him $80 extra. Is Antonio better off or worse off after the price change? (Hint: draw Antonio's budget lines before and after the price increase.) Now suppose Antonio was also buying some old books before the price increase. Does your answer change?

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Microeconomics: Is better off or worse off after the price change
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