Solution-Draw budget set, The price of Commodity 2 is $2

Draw budget set

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Reference no: EM131381533

You have an income of $100 to spend on two commodities. The price of Commodity 1is constant at $5 per unit. The price of Commodity 2 is $2 per unit if you buy less than20 units. However, there is a penalty: the price of any additional unit of Commodity 2in excess of 20 units raises to $3 per unit. Draw your budget set. At which bundle(s)you budget constraint has kink(s)?

Reference no: EM131381533

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Draw budget set : The price of Commodity 2 is $2 per unit if you buy less than20 units. However, there is a penalty: the price of any additional unit of Commodity 2in excess of 20 units raises to $3 per unit. Draw your budget set. At which bundle(s)you budget const..

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Draw budget set

Reference no: EM131381533

Reference no: EM131381533

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