Scenario 17-1 ​

question 85

Multiple Choice

Scenario 17-1
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Assume that a local restaurant sells two items, salads and steaks. The restaurant's only two customers on a particular day are Mr. Carnivore and Ms. Leafygreens. Mr. Carnivore is willing to pay $20 for a steak and $7 for a salad. Ms. Leafygreens is willing to pay only $8 for a steak, but is willing to pay $12 for a salad. Assume that the restaurant can provide each of these items at zero marginal cost.
-Refer to Scenario 17-1. If the restaurant is unable to use tying, what is the profit-maximizing price to charge for a salad?

• A)$16
• B)$14
• C)$12
• D)$7

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Definitions:

Absenteeism

Absenteeism is the frequent absence from work or other obligations without valid reasons, affecting productivity and efficiency.

Gain-Sharing Plans

Incentive plans that reward employees for contributing to a company's increased productivity or profitability.

Current Distribution

The process or manner by which resources, earnings, or assets are apportioned at the present time.

Cash Plan

A type of health insurance plan that covers everyday medical expenses and provides cash payments for specified conditions or treatment.