Re: Demand function

Posted by Algaeconomics on Jun 14, 2017; 7:09am
URL: http://discussion-forum.276.s1.nabble.com/Demand-function-tp7605535p7605557.html

the bundle xy and wz are perfect substitutes

let us assume the price of xy is a=Px+Py
and price of wz is b= Pw+Pz

if a>b then U=wz and hence it becomes x=0, y=0 w=I/2pw and z=I/2pz

if a<b U=xy, x=I/2px, y= I/2py w=0 and z=0

If a=b  x belongs to {0,I/2px} and likewise for others.


I thought it like this :/
Not sure