Each scoop of ice cream costs $5. Your benefit associated with each scoop decreases with each additional scoop because you start to get a stomach ache. How many scoops of ice cream should you eat if your marginal benefit for each scoop is as follows: $24, $16, $7, $3, $0?

Respuesta :

Answer:

You should eat three scoops of ice cream.

Explanation:

The marginal benefit is the amount a consumer would be willing to pay for an additional unit of a product and it tends to decrease when the consumption is higher. According to this and considering that the excerpt indicates that the ice cream costs $5, you should eat three scoops of ice cream because at this point your marginal benefit is $7 and the cost is $5 but if you eat an additional scoop, your marginal benefit is $2 which is the maximum amount you would be willing to pay but the cost is $5.

ACCESS MORE
ACCESS MORE
ACCESS MORE
ACCESS MORE