I a constrained minimization problem pa 500 pb 100 mba , Ask an Expert

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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)?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91927523

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