Find the competitive equilibrium

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Alice and Bob survive on hamburgers and salads. Alice's utility function is UA = hA(sA - 1) where hA and sA are her consumption of hamburgers and salads respectively.

Bob's utility function is UB = (hB - 1)²sB where hB and sB are his consumption of hamburgers and salads respectively. Let p be the price of hamburgers measured in salads. Alice is endowed with one salad and two hamburgers. Bob is endowed with six salads and two hamburgers. Find the competitive equilibrium.

Reference no: EM13734377

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