The table shows the miaximum amount of money you would be

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The table shows the miaximum amount of money you would be willing to pay for increasing numbers of chicken pieces at Fastfood.

Chicken Pieces

1

2

3

4

5

6

7

8

9

10

11

Maximum Payment

$2.00 (for 1 piece)

$3.80 (for 2 pieces)

$5.40 (for 3 pieces)

$6.80 (for 4 pieces)

$8.00 (for 5 pieces)

$9.00 (for 6 pieces)

$9.80 (for 7 pieces)

$10.40 (for 8 pieces)

$10.80 (for 9 pieces)

$11.00 (for 10 pieces)

$11.00 (for 11 pieces)

a) Find the marginal utitlity for each chicken piece. What is the meaning of the marginal utitilty of the 11th piece?

b) If the price of chicken pieces is $1.25 each, how many will you buy?

c) If the price falls to $0.50, how many will you buy? Explain carefully why you will not buy one more.

Reference no: EM13379443

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