consumer is in equilibrium and is spending income in such a way that the marginal utility of product X is 2 units and Y is 22 units. The unit price of X is R94. The price of a unit of Y is:
To determine the price of a unit of Y, we need to compare the marginal utility of X to the price of X.
Since the marginal utility of product X is 2 units and the price of X is R94, the consumer is willing to pay R47 per unit of X in order to achieve a marginal utility of 1 unit.
If the consumer is spending income in such a way that the marginal utility of product Y is 22 units, the consumer is willing to pay R47 x 22 = R1034 for product Y.
Therefore, the price of a unit of Y is R1034.