While Waiting in Line to Buy Two Tacos at 75

question 18

Multiple Choice

While waiting in line to buy two tacos at 75 cents each, and a medium drink for 80 cents, Jordan notices that the restaurant has a value meal containing three tacos and a medium drink all for $2.50. For Jordan, the marginal cost of purchasing the third taco would be

• A) zero.
• B) 20 cents.
• C) 75 cents.
• D) 80 cents.

Understand the conditions under which firms in monopolistic competition operate, including demand curve elasticity.

Identify examples of industries that reflect characteristics of monopolistic competition.

Understand the concept of excess capacity in monopolistically competitive markets.

Comprehend the pricing behavior of monopolistically competitive firms in the short and long run.

---

Definitions:

Inductive Method

A reasoning method where several assumptions, considered true or mostly true, are merged to derive a particular outcome.

Hawthorne Effect

A phenomenon in which individuals modify an aspect of their behavior in response to their awareness of being observed.

Observational Effect

The impact that observation can have on the behavior of subjects being studied, often related to the phenomenon of subjects altering their behavior because they are aware they are being observed.

Valid

Relates to something that is logically sound, well-founded, or produces desired results; often used in the context of arguments or research findings.