Wholesale clubs charge a fixed monthly fee but then offer goods at discount prices.For purposes of this question,suppose a wholesale club and a supermarket offer the same composite grocery item,with the supermarket charging no fixed fee but a higher price for the item.(Assume no corner solutions.)
a.
Anyone shopping at the wholesale club places less value on the marginal item bought than anyone shopping at the supermarket.
b.
Anyone indifferent between the two stores buys more (or at least no less)if she chooses the wholesale club.
c.
We cannot predict how much value different individuals place on the marginal item in each store because we cannot measure utility objectively.
d.
Both (a)and (b)are true.
e.
Both (b)and (c)are true.

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The Answer of Wholesale clubs charge a fixed monthly fee but then offer goods at discount prices.For purposes of this question,suppose a wholesale club and a supermarket offer the same composite grocery item,with the supermarket charging no fixed fee but a higher price for the item.(Assume no corner solutions.)
a.
Anyone shopping at the wholesale club places less value on the marginal item bought than anyone shopping at the supermarket.
b.
Anyone indifferent between the two stores buys more (or at least no less)if she chooses the wholesale club.
c.
We cannot predict how much value different individuals place on the marginal item in each store because we cannot measure utility objectively.
d.
Both (a)and (b)are true.
e.
Both (b)and (c)are true.

Wholesale Clubs Charge a Fixed Monthly Fee but Then Offer