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A baker knows that her customers will pay $5 for a loaf of bread, but if the marginal utility decreases after the first loaf, how might the baker get her customers to buy more than one loaf?
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A baker knows that her customers will pay $5 for a loaf of bread, but if the marginal

utility decreases after the first loaf, how might the baker get her customers to buy more

than one loaf?

User Tom Imrei
by
4.8k points

1 Answer

14 votes

Answer: Sell at lower price

Step-by-step explanation:

Marginal Utility is the amount of satisfaction that her customers will get with every additional unit of bread purchased.

If the marginal utility decreases, her customers will buy less bread because to them, it is not as valuable anymore. If she offers her bread at lower prices, the customers would buy more because the new price will align with the lower utility the customers get from the additional loaves.

User Dan Me
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