Note: please answer part b,c,d 1st part answer already complete you can take reference from it Given: U(x,y) = x0.25 y0.75 MUx=0.25 x-0.75 y0.75 MUy = 0.75 x0.25 y-0.25 Px=2 Py=12 a)Find the minimum cost to reach a utility of 1,189. b)Now assume that Px increases to 4 and find the new minimum cost. c) What is the savings from substitution in part b)? d) From the part a) outcome, what lower Py would allow a utility of 2,000?

Note: please answer part b,c,d 1st part answer already complete you can take reference from it Given: U(x,y) = x0.25 y0.75 MUx=0.25 x-0.75 y0.75 MUy = 0.75 x0.25 y-0.25 Px=2 Py=12 a)Find the minimum cost to reach a utility of 1,189. b)Now assume that Px increases to 4 and find the new minimum cost. c) What is the savings from substitution in part b)? d) From the part a) outcome, what lower Py would allow a utility of 2,000?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 7E: The Questor Corporation has experienced the following sales pattern over a 10-year period: Compute...

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