In what range of muffins per month would that saturation, Ask an Expert

Economics

A muffin stand lets consumers choose among a menu of three pricing options:

(a) a monthly subscription fee of $200 and a price per muffin of $4;

(b) a monthly subscription fee of $300 and a price per muffin of $3; or

Suppose that muffins are incredibly addictive, so consumers have perfectly inelastic demand for them, up to a certain saturation point. In what range of muffins per month would that saturation point need to be for a consumer to select pricing option b?

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M968916

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