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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
Hi, I'm looking for an explanation for this question, what the logic behind the answer is etc.
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1.The only frozen yogurt shop in town is being closed down by city or- dinance. Before that, Jerry has one last chance to buy his favorite áavors: chocolate and raspberry. He surveys the prices o§ered at the shop and pur- chases his best a§ordable combination of the two áavors (you may assume he purchases strictly positive amounts of both áavors and that he has no money left after he leaves the shop). The shop doors close behind him for the last time as he heads home to store the yogurt in his freezer. On the way home, he runs into Newman who has secretly been hoarding pints of both types of yogurt. Newman makes Jerry the following o§er: he will buy from or sell to Jerry as many pints of the two áavors Jerry wishes to transact. The catch is that NewmanÃÂs price for raspberry yogurt is more than the price Jerry paid at the shop. The price of chocolate is the same. Will Jerry do business with Newman? Explain your answer.Â
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