Reginald Is Fond of Cigars

question 23

Multiple Choice

Reginald is fond of cigars.His utility function is U(x, c) = x + 10c - .5c², where c is the number of cigars he smokes per week and x is the money that he spends on the consumption of other goods.Reginald has $200 a week to spend.Cigars used to cost him $1 each, but their price went up to $2 each.This price increase was as bad for him as losing income of

• A)$5.
• B)$7.25.
• C)$9.
• D)$8.
• E)$8.50.