Use the Table Below to Answer the Following Question

question 14

Multiple Choice

Use the table below to answer the following question.
Table 5.2.4

-Table 5.2.4 shows the demand schedules for pizza for Abby and Barry who are the only buyers in the market.What is the marginal social benefit from the 45th slice of pizza?

• A)$3.50
• B)$4.00
• C)$2.50
• D)$5.00
• E)$4.50

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Definitions:

Inelastic Demand

A situation where the demand for a good or service is relatively insensitive to changes in price, meaning that percentage changes in price lead to smaller percentage changes in the quantity demanded.

Substitution Effect

The substitution effect occurs when consumers replace more expensive items with less costly alternatives as prices change.

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the additional output generated will eventually decrease.

Government Subsidies

Financial support provided by the government to businesses, individuals, or other entities, typically to encourage certain activities or reduce costs.