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While Waiting in Line to Buy One Cheeseburger for $1

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While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75. She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of


Definitions:

Total Costs

The complete cost of production that includes both fixed and variable costs.

Tax

Tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Software Package

A bundle of software components or programs that are designed to work together to perform a specific function or set of functions.

Cost Plus Pricing

A pricing strategy where the selling price of a product is determined by adding a specific markup to its production cost.

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