Assume in the market with two consumers, Chloe and Oliver. Chloe's utility function is U(x, y) = 2x + 120¹/2 Oliver's utility function is U(x, y) = 2x+10y. At a Pareto optimal allocation in which both individuals consume some of each good, how much y does Chloe consume? O 60 05 225 36

Assume in the market with two consumers, Chloe and Oliver. Chloe's utility function is U(x, y) = 2x + 120¹/2 Oliver's utility function is U(x, y) = 2x+10y. At a Pareto optimal allocation in which both individuals consume some of each good, how much y does Chloe consume? O 60 05 225 36

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Concept explainers

Product and Price Bundling

Product and price bundling is used as a marketing strategy by businesses, where complementary products and services are combined and sold as a package deal. This bundled price is usually less than the total price of the individual products if they were to be sold separately. When bundled and sold, each product is sold at a reduced price. Using a price bundling strategy helps increase the average revenue per user and also increases the engagement with the user. This happens as the perceived value of the bundled products is more than the individual products.

Question

Assume in the market with two consumers, Chloe and Oliver. Chloe's utility function is U(x, y) = 2x + 120y1¹/2
Oliver's utility function is U(x, y) = 2x + 10y. At a Pareto optimal allocation in which both individuals consume
some of each good, how much y does Chloe consume?
I
O 60
05
O
O
225
36

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