Answer to Question #132374 in Microeconomics for Yola

Question

Using diagrams differentiate between corner solution and interior solution

Answer 1

A corner solution is a special solution to an agent's maximization problem where the quantity of one of the arguments is maximized function is zero.

On the other hand, An interior solution is a choice made by an agent that can be characterized as an optimum located at a tangency of two curves on a graph.