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After careful contemplation, you decide that your willingness to pay for apples today is as follows:

$5 for the first apple
$4 for a second apple
$3 for a third apple
$2 for a fourth apple
$1 for a fifth apple
$0 for any apples beyond that.
Upon going to the store, you observe that the price each apple is $2.50.
Therefore:

User Maslak
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1 Answer

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Final answer:

Given your decreasing willingness to pay for each subsequent apple, and the market price of $2.50 per apple, you would buy four apples. You will not buy the fifth apple since your willingness to pay ($1) falls below the market price.

Step-by-step explanation:

This Economics scenario falls under the Mathematics category, as it involves basic arithmetic and economic principles such as willingness to pay and market price determination. Given your willingness to pay for apples on a decreasing scale ($5 for the first, $4 for the second, and so on), the price at which you should stop buying apples is when the market price exceeds your willingness to pay.

At the store, each apple costs $2.50. Your willingness to pay for the first apple is $5, so you will buy the first apple. For the second apple, your willingness to pay is $4, which is still above the market price, so you buy the second apple as well. The same goes for the third apple, where your willingness is $3, and for the fourth apple, where your willingness is $2. However, you are not willing to pay more than $2 for the fifth apple, and since the market price is $2.50, you will not purchase the fifth apple.

In conclusion, you would buy four apples, spending a total of $10 (2.50 x 4), given that your respective willingness to pay is at or above the market price for each of those apples.

User AmineG
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