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4

Let $K:=y-(f+fa)-(t+ta)x$, and so $c=K-pq$. From condition $(\mathrm{A1})$, \begin{align} &&\frac{v_q(\cdot)}{v_c(\cdot)}&=p \\ \quad\Rightarrow\quad && \frac{\alpha[K-pq]^{1-\alpha}q^{\alpha-1}}{(1-\alpha)[K-pq]^{-\alpha}q^\alpha}&=p \\ \quad\Rightarrow\quad && pq&=\alpha K \\ \quad\Rightarrow\quad && q&=\frac{...

2

Becker, G. S. (1991). A note on restaurant pricing and other examples of social influences on price. JPE.

4

Upward sloping demand curves are rare but they can exist for a class of a good that is called Giffen good. Upward sloping demand can exist because price of a good or service has two effects: Substitution Effect: Higher price of a good means that people will rather buy something else. Income Effect: Higher price means peoples budget constraint is tighter. ...

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