Assume in the market with two consumers, Chloe and Oliver. Chloe is endowed with 9 units...

Assume in the market with two consumers, Chloe and Oliver. Chloe is endowed with 9 units of good 1 and 6 units of good 2. Oliver is endowed with 18 units of good 1 and 3 units of good 2. They have the same utility function U(x₁, x₂) = x₁^1/3x₂^2/3. If we let the price of good 1 is $1, then what will be the equilibrium price of good 2?

a. $2

b. $12

c. $1

d. $6

Expert Solution

Rahul Sunny answered 2 years ago

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