Consider a rational consumer with a utility function given by U(x,m)=Aln(2x)+m. The consumer needs to decide how much of good x to buy given the following pricing rule: the first 10 units sell at a price of $2 p/unit, additional units sell at a price of $3 p/unit.
QUESTION. What is the maximum value of A at which the consumer buys 10 units or less?
1 answer
10