Use the following graph of the marginal benefit to joe from consuming hot dogs t

Question

Use the following graph of the marginal benefit to joe from consuming hot dogs to answer this question. What happens to Joe prime s marginal benefit from consuming hot dogs as lie consumes more hot dogs? Explain your answer In deciding how many hot dogs to consume, what should be Joe criterion? Explain your answer. Suppose the marginal cost of consuming hot dogs is constant and equal to $6. How many hot dogs will Joe want to consume given this information? Why does he choose this amount? Suppose the marginal cost of consuming hot dogs is constant and equal to $4. What will happen to Joe prime s consumption of hot dogs? Explain why Joe makes this choice of consumption.

Explanation / Answer

A) Marginal benefit is clearly decreasing as the quantity is increasing you can see that on the graph

B) 30*6 = 180 at 30 there is maximum utilty and maximum benefit is derived

C) you say that it is constant price of $6, Then joe must eat only the number in which he feels absolutely good. Then the number would be 10. after 10 you can see the satisfaction rate is decreasing

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