Answer to Question #265885 in Microeconomics for muskan

Question

Neha and Sonam consume only Coke and Pepsi in a two person and two goods exchange economy. Nehaconsumes these two goods in fixed proportions such that she consumes 2 bottles of coke with 1 bottle of Pepsi.Sonam's utility function is given by U = 4P + 3C . In the economy, there is a total of 100 bottles of Pepsi and 200bottles of Coke. If Neha initially had 60 bottles of Pepsi and 80 bottles of coke, then in the equilibrium position,Sonam will consume:​

Answer 1

If Neha initially had 60 bottles of Pepsi and 80 bottles of coke, then in the equilibrium position he will be ready to give to Sonam between 10 to 20 bottles of Pepsi. So, Sonam will consume between 50 to 60 bottles of Pepsi.