Owen buys electricity and food The power company offers a Owen buys electricity and food. The power.

Owen buys electricity and food The power company offers a
Owen buys electricity and food. The power company offers a volume discount: electricity costs $0.10 per kwh for the first 500 kwh, and $0.08 per kwh for electricity beyond 500 kwh. Suppose Owen’s preferences have the declining MRS property, and that a unique bundle on the interior of Owen’s budget line satisfies the tangency condition. Is that bundle necessarily a best choice? Explain your answer with a graph.

Owen buys electricity and food The power company offers a

 

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