In constrained minimization problem

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Reference no: EM131173109

In a constrained minimization problem, PA = $500, PB = $100, MB(A) = 50, and MB(B) = 60. If one unit of A is taken away, how many units of B must be added to keep total benefits constant?

a. If one unit of A is taken away, how many units of B must be added to keep total benefits constant?

b. By how much is total cost reduced by the substitution in part a?

c. If the substitution in part a continues until equilibrium is reached, what will be the equilibrium relation between MB(A) and MB(B)?

Reference no: EM131173109

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