Reginald is fond of cigars. His utility function is U(x, c) = x + 10c - .5c2, where c is the number of cigars he smokes per week and x is the money that he spends on the consumption of other goods. Reginald has $200 a week to spend. Cigars used to cost him $1 each, but their price went up to $2 each. This price increase was as bad for him as losing income of
A) $5.
B) $7.25.
C) $9.
D) $8.
E) $8.50.
Correct Answer:
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