Figure 6.5 Manuri has $300 to spend on Pilates classes and Yoga classes.The price of a group Pilates class is $20 and the price of a group Yoga class is $10.Manuri's optimal bundle is given by 'A' in Figure 6-5.
-Refer to Figure 6.5.Suppose the price of Pilates sessions rises to $30 while income and the price of Yoga sessions remain unchanged.What is her new optimal bundle?

Question

Figure 6.5  Manuri has $300 to spend on Pilates classes and Yoga classes.The price of a group Pilates class is $20 and the price of a group Yoga class is $10.Manuri's optimal bundle is given by 'A' in Figure 6-5.
-Refer to Figure 6.5.Suppose the price of Pilates sessions rises to $30 while income and the price of Yoga sessions remain unchanged.What is her new optimal bundle?

Quizplus · Accepted Answer

When the price of Pilates sessions increases, the consumer will adjust their consumption to maximize utility given the new budget constraint. Bundle C represents the new optimal choice where the consumer can afford the most preferred combination of goods within their budget.

Figure 65 Manuri Has $300 to Spend on Pilates Classes