Suppose consumers face the utility function: U (Xi, Yt) = XiYt; for i = 1, 2, … … … …, M Firms face the cost function: Cj(qj) = q2j + F (a) Solve for equilibrium in perfect competition. (b) Show the effect of change in income on equilibrium quantity.

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Suppose consumers face the utility function:
U (Xi, Yt) = XiYt; for i = 1, 2, … … … …, M

Firms face the cost function:
Cj(qj) = q2j + F

(a) Solve for equilibrium in perfect competition.
(b) Show the effect of change in income on equilibrium quantity.

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