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The Einstein Bagel Corp. offers a frequent buyer program whereby a consumer receives a stamp each time she purchases one dozen bagels for $6. After

The Einstein Bagel Corp. offers a frequent buyer program whereby a consumer

receives a stamp each time she purchases one dozen bagels for $6.

After a consumer accrues 10 stamps, she receives one dozen bagels free. This

offer is an unlimited offer, valid throughout the year. The manager knows her

products are normal goods. Given this information, construct the budget set

for a consumer who has $200 to spend on bagels and other goods throughout

the year. Does Einstein's frequent buyer program have the same effect on the

consumption of its bagels that would occur if it simply lowered the price of

one dozen bagels by 3 percent? Explain

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