How Does Marginal Utility Apply To Newspaper Vending Machines And Soda Vending Machines?
how does the concept of marginal utility apply to this: Newspaper vending machines are designed so that once you have paid for one paper, you could take more than one paper. but soda vending machines, once you have paid for one soda, dispense only one soda at a time.
Tags: Apply, Does, Machines, Marginal, Newspaper, Soda, Utility, Vending
December 4th, 2009 at 12:27 pm
where there is gestation lag there the concept of marginal utility depends on retuns so we have to apply R-square (rate of return criterion) or npV (NET PRESENT VALUE CRITERION)
December 4th, 2009 at 1:57 pm
there is no increased utility in the newspaper machine because there is no value to reading the paper more than once (i.e. getting multiple copies). For sodas it is different because I can get increased value by getting more than the one soda that I paid for (I get more enjoyment out of drinking two rather than one)