Scenario 17-5 Assume That a Local Restaurant Sells Two Items, Salads and Salads

question 162

Multiple Choice

Scenario 17-5
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 17-5. If the restaurant is able to use tying to price salads and steaks, what is the profit-maximizing price to charge for the "tied" good?

• A)$27
• B)$20
• C)$19
• D)$15

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Definitions:

Tractors

Heavy farm vehicles designed for plowing, tilling, and planting, essential in modern agriculture for efficient large-scale farming.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost than competitors.

Crude Oil

An unrefined, naturally sourced petroleum compound made of hydrocarbon collections and different organic elements.

Comparative Advantage

The ability of an individual or group to produce a good or service at a lower opportunity cost than another.