Market research revealed that the customers can be separated into 5 groups according to their preferences over bundles of goodxs x and y. The respective empirical utility functions were constructed and they look as follows: 1. U1(x.y) = 2x+5y. 2. U2(x.y) = 100/(2x+5y). 3. U3(x.y) = 3(2x+5y)0.5 4. U4(x.y) = 7(2x+5y)2. 5. U5(x.y) = -150/(2x+5y). How many different preferences were identified by the market research. 0 1 O 2 O 3 O 4 O 5

Market research revealed that the customers can be separated into 5 groups according to their preferences over bundles of goodxs x and y. The respective empirical utility functions were constructed and they look as follows: 1. U1(x.y) = 2x+5y. 2. U2(x.y) = 100/(2x+5y). 3. U3(x.y) = 3(2x+5y)0.5 4. U4(x.y) = 7(2x+5y)2. 5. U5(x.y) = -150/(2x+5y). How many different preferences were identified by the market research. 0 1 O 2 O 3 O 4 O 5

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter15: Strategic Games

Section: Chapter Questions

Problem 15.2IP

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