Acme Foods Wants to Make Its Chips Saltier,but It Doesn't

question 104

Multiple Choice

Acme Foods wants to make its chips saltier,but it doesn't want to spend more than it has to on salt.A sample of consumers are asked to compare its current chip (saltiness = 100) with saltier versions and to say whether the new version is saltier.On average,sample consumers reliably say the new chip is saltier when its saltiness value is 108,but not when its saltiness value is below 108.Assuming Acme Foods' sample consumers are representative of people in general,which of the following best represents the just noticeable difference for saltiness?

• A)8%
• B)108
• C)80%
• D)100

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Definitions:

Imperfect Competitors

Firms or entities in a market structure where they have some control over the price of their products, due to lack of perfect competition.

Natural Monopolies

Market situations where due to high fixed costs or unique resources, a single firm can supply a product or service more efficiently than any potential competitor, often resulting in regulation.

Public Utilities

Companies that provide essential services such as water, electricity, and gas to the public and are often subject to regulatory oversight.

Short Run

A timeframe in economics during which at least one input (like plant size) is fixed and cannot be changed, focusing on immediate operational decisions.