Question

suppose that a consumer always consumes 2 spoons of sugar with each cup of coffee. If the price of sugar is p1 per spoonful and the price of coffee is p2 per cup and the consumer has m dollars to spend on coffee and sugar. How much will he or she want to purchase?

Answer 1

Explanation:

consumer not change his demand because it is his habbit so I think no change

Answer 2

Answer:

The consumer will purchase$\frac{m}{2 p 1+p 2}$quantity based on the budget.

Explanation:

Given the price of a spoonful of sugar is p1;

The price a cup of coffee is p2;

The amount of money the consumer has is m dollars.

Let us assume that the consumer consumes x cups of coffee.

Therefore, he would buy x coffee and 2x spoons of sugar.

On satisfying the budget constraint, we can conclude that

$2 p 1 x+p 2 x \leq m$

Ignoring the inequality,

$2 p 1 x+p 2 x=m$$\therefore x=\frac{m}{2 p 1+p 2 x}$

Hence, the consumer purchases $\frac{m}{2 p 1+p 2}$ of sugar and coffee.