Suppose you went to a pet shop to buy a puppy. You saw one you liked, and
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Suppose you went to a pet shop to buy a puppy.
You saw one you liked, and it cost as much as the highest price you would pay. You take it home and immediately fall in love with it. The next day, your friend offers you twice the price for the puppy, but you refuse. Explain your behavior in terms of marginal utility analysis. What can you say about your consumer surplus, yesterday’s and today’s?
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