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In: Economics

Suppose that Pete enjoys painting purple people. He has very particular preferences and must have exactly...

Suppose that Pete enjoys painting purple people. He has very particular preferences and must have exactly 3 gallons of blue paint for each 2 gallons of red paint. Let R be the number of gallons of red paint and B be the number of gallons of blue paint. Also, let PR be the price of red paint. Suppose Pete has $15 to spend on paint. Also, the price of blue paint is PB=$2 per gallon.

Graph Pete's demand curve for red paint using the prices PR=$1, PR = $2, and PR =$3. Be sure to label your graph carefully and accurately.

Solutions

Expert Solution

Preferences presented here are min preferences where blue paint and red paint are perfect complements that are always used in a fixed proportion.

Rahul Sunny answered 1 year ago
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