Business
Business, 09.10.2019 20:00, jadahilbun01

Tis common for supermarkets to carry both generic (store-label) and brand-name (producer-label) varieties of sugar and other products. many consumers view these products as perfect substitutes, meaning that consumers are always willing to substitute a constant proportion of the store brand for the producer brand. consider a consumer who is always willing to substitute four pounds of a generic store-brand sugar for two pounds of a brand-name sugar. do these preferences exhibit a diminishing marginal rate of substitution between store-brand and producer-brand sugar? assume that this consumer has $24 of income to spend on sugar, and the price of store-brand sugar is $1 per pound and the price of producer-brand sugar is $3 per pound. how much of each type of sugar will be purchased? producer-brand sugar: pounds store-brand sugar: pounds if prices change such that the price of store-brand sugar was $2 per pound and the price of producer-brand sugar was $3 per pound, how much of each type of sugar will be purchased?

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Tis common for supermarkets to carry both generic (store-label) and brand-name (producer-label) vari...

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