Answer Happy

As an employee for the marketing division in 2010 for Skullcandy, you are asked to predict how many Cassette Junior Volume-Limited Wired Headphones (W) and Crusher ANC Personalized Noise Canceling Wireless Headphones (WL) customers are likely to buy. After your team conducts some marketing research, they estimate that the following utility function best fits a representative consumer: U( WWL) = W.5 + WL:5 = The market price for one W is $20 and the price for one WL is $200. This research also reveals that a consumer has a budget of $300 dollars when purchasing from Skullcandy. Answer the following questions using this information. a a. How much W is a consumer expected to purchase given these prices, utility function, and budget? (10 pts) b. Derive the consumer's demand curve for W. You can leave Pw and Pwźwithout plugging in their values when you derive the demand curve. This will help for part c. (10 pts) a c. Say there is a sale on WL and the price per unit is halved from $200 to $100. Explain what will happen to the consumer's demand curve for W. (5 pts) d. Given your answer in part c., are these goods complements or substitutes? (5 pts)