Scoops of Ice Creanm 1 2 4 5 6 1525 16 Total Benefit Margina

Scoops of Ice Creanm 1 2 4 5 6 15.25 16 Total Benefit Marginal Benefit Total Cost Marginal Cost 10 13 You can pay $10 for all you can eat ice cream. If you choose this option, how many scoops of ice cream will you eat?

Solution

From the question I understand that all ice cream costs him $10, no matter however much he eats.

In this economy, equilibrium is attacined at a point where MB=MC. However, since in the given question MB is not equal to MC at any output level, thus he will consume at a point where TB=TC.

Thus, he will eat 2 units of ice cream.

	1	2	3	4	5	6
Total Benefit	6	10	13	15.25	16	13
Marginal benefit	-	4	3	2.25	0.75	-3
Total cost	10	10	10	10	10	10
Marginal cost	-	0	0	0	0	0