Using the following figures, we can show that Mickey’s utility for live concerts must increase from 8 units to 20 units because of the falling price of live concerts, while Minnie’s utility stays the same, but cannot fall.
Mickey Minnie
Music Tracks 20 40
Live Concerts 8 0
Mickey Minnie
Music Tracks 20 40
Live Concerts 20 0
Mickey Minnie
Monthly budget $80 $80
Price of music tracks $2.00 $2.00
Price of live concerts $5.00 $5.00
Consumption of music tracks 20 40
Consumption of live concerts 8 0
Music Tracks Live Concerts Total
Mickey $40 ($2 x 20) $40 ($5 x 8) $80
Minnie $80 ($2 x 40) $0 $80
The new price of live concerts = $2.00
Music Tracks Live Concerts Total
Mickey $40 ($2 x 20) $40 ($2 x 20) $80
Minnie $80 ($2 x 40) $0 $80
Learn more about increasing utility due to the falling price of items at https://brainly.com/question/25671407
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At the initial price, Mickey consumes both goods but Minnie buys only downloaded music an does not go to live concerts. Now the price of live concerts falls. Use figures to show that Mickey’s utility must increase and that Minnie’s utility may increase or stay the same, but cannot fall.
