One way to promote a new business is to offer free items.If you were to open a new restaurant and offer free food,you likely would have a line out the door.How would an economist understand the behavior of those standing in line?
A) Those waiting in line place a high value on the use of their time.
B) Those waiting in line believe that the marginal cost of waiting in line exceeds the marginal benefit of waiting in line.
C) Those waiting in line place a low value on the use of their time.
D) Those waiting in line believe that the marginal cost of waiting in line is zero.
E) Those waiting in line believe that the marginal benefit of waiting in line is zero.

Question

Quizplus · Accepted Answer

Economists would understand that those waiting in line place a low value on the use of their time, as they are willing to spend it waiting for free food rather than engaging in other activities.

One Way to Promote a New Business Is to Offer