Answer to Question #189350 in Microeconomics for Oratiloe Masenya

Question #189350

Given that Rhumbi's budget line is 25=1/4Qcake +Qtea and the price of tea is R10. What is the equilibrium price and demand?

Expert's answer

"\\frac{1}{4}Qc+Q_t=25"

if Qc=0, then Qt=25

"I=25\\times10=250"

If Qt=0, Qc=100

"p_c=\\frac{250}{100}=2.5"

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