Bring constraints and preference together Economists assume that individuals alw

Question

Bring constraints and preference together Economists assume that individuals always choose the most preferred feasible (or affordable) bundle. If individuals indeed behave this way, then the rate at which the consumer is willing to exchange good y for good x is the rate at which the market is willing to exchange good x for good y (or the rate at which the market vales good x relative to good y Examples: Cash or gift cards, perfect compliments and firm pricing strategy, perfect substitutes, profits and outputs and managerial incentives Question: Bob's Pizza is offering the following deal: buy one large pizza, get one large pizza free (limited to one free pizza per customer) Can you think of other situations with similar pricing strategies?

Explanation / Answer

shows buy one get one half off bundles (value meals)at all fast food restaurants

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