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Use the Law of Diminishing Marginal Utility to Explain Why

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Essay

Use the law of diminishing marginal utility to explain why a pizza parlor might price pizzas in the following way: "Buy one pizza for $12,get the second pizza for $6." Why not simply charge $9 per pizza instead?


Definitions:

Greenmail Arrangement

A situation where a company buys back its own shares from a potential acquirer at a higher price to avoid a takeover attempt.

Pre-Offer Strategy

A plan devised prior to making an offer, typically in negotiation or bidding contexts, to maximize successful outcomes.

Tender Offer

A public proposal made by a person or company to shareholders to buy shares of a corporation, typically at a premium over the market price.

Stock Acquisition

The purchase of enough of the voting stock of a corporation to allow the buyer to control the corporation. Also called takeover.

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