What can be said about the cross-price elasticity of demand

Reference no: EM13177669

suzie purchases two goods- food and clothing. she has a utility function u9x,y0 x*y where x denotes the amount of food consumed and y the amount of cloting. the marginal utilites for this utility function are MUx=y and MUy=x she has income of M dollars.

A. show that the equation of her demand curve for clothing is y=M/2py

B. is clothing a normal good? draw her demand curve for clothing when the level of income is M=200. Label this deman curve D1. Draw the demand curve when M=300 and label this demand curve D2.

C. what can be said about the cross-price elasticity of demand of food with respect to the price of clothing.

Reference no: EM13177669

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