After the great success making pies with Johnny Depp in Sweeney Todd, your friend Helen B. Carter has opened a bakery. She has done some market research and finds that your neighbors value cheesecakes according to the following schedule
|
Cheesecake
|
Marginal utility
|
|
1
|
$30.00
|
|
2
|
$27.00
|
|
3
|
$24.30
|
|
4
|
$21.87
|
|
5
|
$19.68
|
|
6
|
$17.71
|
|
7
|
$15.94
|
|
8
|
$14.35
|
a. Using a spreadsheet, graph the community's demand curve for cheesecakes. Does the demand curve have a positive or negative slope? Why?
b. How many cheesecakes will she sell at $17.71? How many at $24.30?
c. What will happen if a new doctor comes to town and tells everyonethat cheesecake is good for you? What will happen if she changes her recipe and her cheesecakesno longer taste as good?