Suppose That the Owner of a Local Ice Cream Store

question 13

Multiple Choice

Suppose that the owner of a local ice cream store, knowing that demand for ice cream is higher when the weather is warmer, always charges a price in cents for a scoop of ice cream that is equal to two times the current outdoor temperature, measured in Fahrenheit (so that if it is 90 degrees outside, the ice cream is $1.80 per scoop) . This type of behavior is ________.

• A)exactly the type of behavior that Keynes believed most firms exhibit
• B)known as meeting demand
• C)inconsistent with the key assumption upon which the basic Keynesian model is built
• D)free from menu costs

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Definitions:

Profiting

The act of earning a financial gain or benefit, often from business operations or investments.

Insure

The act of providing or acquiring insurance coverage to mitigate financial loss due to unforeseen events.

Legal Column

A section in a publication or media outlet dedicated to discussing legal matters, advice, or news.

Ferry Service

A ferry service is a transportation service using boats or ships to carry passengers, vehicles, or goods across a body of water, typically operating over a scheduled route.