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Author Question: Related to the Economics in Practiceon p. 316. Producers of Honest Tea add less sugar to their tea ... (Read 45 times)

big1devin

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Related to the 
Economics in Practice on p. 316. Producers of Honest Tea add less sugar to their tea than the amount that would maximize consumer's total utility from sugar because


◦ the financial cost of the additional sugar is less than the additional revenue that the firm would earn.
◦ producers are attempting to differentiate their product from the very sweet Snapple.
◦ the marginal utility to the consumer from adding more sugar is very low (near zero) while the marginal health cost (added calories) is quite high.
◦ producers are attempting to market their product to diabetics.


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Marked as best answer by big1devin on Apr 19, 2019

xMRAZ

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