Question
A hot dog cart can sell the Astro special to consumers downtown who have a $10 reservation price or sell outside the World Series to
A hot dog cart can sell the Astro special to consumers downtown who have a $10 reservation price or sell outside the World Series to game-goers who have a reservation price of $20. An equal number of hot dogs can be sold at each site. The marginal and average costs are $6 at each site.
Knowing the reservation price of the buyers will increase the total surplus because:
(a) hot dog vendors will go to underserved locations
(b) this allows those with high and low incomes to each get hot dogs
(c) this helps hot dogs to go to those who like them the most
(d) this helps hot dogs go to those with the greatest willingness to pay
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