Figure 10-10
-Refer to Figure 10-10. If the consumer has $240 to spend on DVDs and CDs, what is the price of a DVD if the budget constraint is BC₁?

Question

Figure 10-10 -Refer to Figure 10-10. If the consumer has $240 to spend on DVDs and CDs, what is the price of a DVD if the budget constraint is BC₁?

Quizplus · Accepted Answer

The budget constraint BC1 represents the consumer's spending limit. If the consumer has $240 and the budget constraint allows for a combination of DVDs and CDs, the price of a DVD can be determined by dividing the total budget by the maximum number of DVDs that can be purchased, which is $240 / 12 DVDs = $20 per DVD.

Figure 10-10 -Refer to Figure 10-10. If the Consumer Has $240 to Has