Kelly Has Decided That She Would Enjoy Eating Another Cupcake

question 339

Multiple Choice

Kelly has decided that she would enjoy eating another cupcake. Which of the following statements is consistent with Kelly's decision?

• A) Kelly's marginal utility has decreased with a corresponding decrease in total utility.
• B) Kelly's marginal and total utility remain unchanged.
• C) Kelly's marginal utility has decreased but it is unclear what has happened to total utility.
• D) Kelly's total utility has increased but it is unclear what has happened to her marginal utility.

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Definitions:

Inelastic Demand

Refers to a situation where demand for a product does not significantly change with a change in the product's price.

Higher Price

A situation where the cost of a good or service is increased beyond its standard or previous rate.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the financial gain exceeding opportunity costs.

Marginal Revenue

The extra revenue received from the sale of an additional unit of a product or service.