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The Davis Farmer’s Market sells corn for $1 an ear. At this price, Gunrock buys 6 ears each Wednesday. What would happen to Gunrock’s consumption of corn if the market offered corn at $1 an ear for the first 6 years, but 50 cents an ear for each additional ear? Use a diagram containing indifference curves and budget constraints to demonstrate your answer.
HINT: Assume normal indifference curves and that the (initial) tangency condition is satisfied when Gunrock buys 6 ears of corn.
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