Newspaper vending machines,from which customers could take more than one paper for the same amount of money if they so desired,illustrate the publishers' belief that the _____
A)average utility of two identical newspapers is zero or less.
B)total utility from two identical newspapers is zero or less.
C)marginal utility of a second identical newspaper is zero or less.
D)marginal utility of a second identical newspaper is greater than the marginal utility of the first newspaper.
E)total utility from two identical newspapers is less than the total utility from the first newspaper.

Question

Quizplus · Accepted Answer

The fact that customers can take more than one paper for the same amount of money suggests that the marginal utility of a second newspaper is not greater than the price of the newspaper. If it were, publishers would charge more for the second newspaper. Therefore, the marginal utility of a second identical newspaper must be equal to or less than the price of the newspaper, which would be why customers can take more than one for the same price.

Newspaper Vending Machines,from Which Customers Could Take More Than One