Regardless of the initial endowment

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An economy consists of 2 agents (A and B) and two goods (x, y) . Each agent has and utility function U(x,y)=x^3 y^2= A,B. Agent A has an intitial allocation of (10,50). Agent B has an initial allocation of (20,10).

Show that the line that connects the corners of the box is the contract curve and show that every competitive equilibrium, regardless of the initial endowment, has the the same price and find that price.

Reference no: EM131092334

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