Refer to the following:

The consumer faces a budget constraint because the market price of X is $3, the market price of Y is $3, and the consumer's budget is $90.
-In order for this consumer to choose the corner solution at point E, which of the following must occur?
A) price of X must rise to $6.
B) price of Y must rise to $6.
C) price of X must rise to $9.
D) price of Y must rise to $9.

Question

Refer to the following:

The consumer faces a budget constraint because the market price of X is $3, the market price of Y is $3, and the consumer's budget is $90.
-In order for this consumer to choose the corner solution at point E, which of the following must occur?
A) price of X must rise to $6. 
B) price of Y must rise to $6. 
C) price of X must rise to $9. 
D) price of Y must rise to $9.

Quizplus · Accepted Answer

For a consumer to choose a corner solution at point E, the price of X must rise significantly to make the consumer allocate all their budget to good Y, which happens when the price of X rises to $9.

Refer to the Following