On a Recent Trip to Starbucks We Noticed That the Price

question 56

Multiple Choice

On a recent trip to Starbucks we noticed that the price of coffee per ounce is highest for the short size, slightly lower for the tall, even lower for the grande, and lowest for the venti. Why do they price this way?

• A)marginal cost curve is downward sloping
• B)the price of the short size captures all the consumer surplus and the others don't
• C)average cost curve is downward sloping
• D)each size has a different elasticity

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