Related to the Economics in Practice on p. 316. Producers of Honest Tea add less sugar to their tea than the amount that would maximize consumer's total utility from sugar because
A) the financial cost of the additional sugar is less than the additional revenue that the firm would earn.
B) producers are attempting to differentiate their product from the very sweet Snapple.
C) the marginal utility to the consumer from adding more sugar is very low (near zero) while the marginal health cost (added calories) is quite high.
D) producers are attempting to market their product to diabetics.
Correct Answer:
Verified
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