Ron's Utility Function Is Given by U(x,y)= Min[2x,y]

question 55

Multiple Choice

Ron's utility function is given by U(x,y) = min[2x,y]. If the price of x is 1 and the price of y is 1, Ron spends his $12 income on:

• A)4 units of x and 4 units of y.
• B)8 units of x and 8 units of y.
• C)4 units of x and 8 units of y.
• D)8 units of x and 4 units of y.

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Definitions:

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Third-Degree Price Discrimination

A pricing strategy where a seller charges different prices to different consumer groups for the same product or service, based on varying demand elasticities.

Third-Degree Price Discrimination

A pricing strategy where a seller charges different prices to different consumer groups based on their elasticity of demand.

Profits Maximization

Aiming to achieve the highest possible profits through decision-making related to business operations and finance.