Question

Suppose that the market price for... Suppose that the market price for hot dogs sold by street vendors has just risen from $4.50 to $5.00, and that in response Curly has now begun operating a hot dog cart. We can assume that Curly's reservation price for hot dogs is: A. at least $5.00 B. greater than $4.50 but no more than $5.00 C. $5.00 D. $4.50

Answer 1

Answer:

B. greater than $4.50 but no more than $5.00

Explanation:

From the given statement in the question it can be observed that the Curly was not operating a hot dog cart when the price of hot dogs was $ 4.50.

But curly started operating a hot dog cart when the price risen to $5.

Therefore,

Curly's reservation price will be in between $4.50 to $5.

Reservation price is the minimum price which is acceptable to the producer, on the producer side.