Suppose that when you ate a pizza you only had to pay for the crust but not
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Suppose that when you ate a pizza you only had to pay for the crust but not the toppings. What would happen to (i) the number of pizzas you ate, and (ii) the amount and quality of the toppings on each one? If you faced a price of zero for toppings, after you had fully adjusted to this new pricing, what would be the marginal value to you of the last topping consumed? (You can give an exact number.) Does this equal the marginal cost of the last topping, assuming that toppings are a scarce good? Are you consuming the efficient number of toppings? Of pizzas?
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The Economics of Public Issues
ISBN: 978-0134018973
19th edition
Authors: Roger LeRoy Miller, Daniel K. Benjamin, Douglass C. North
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