### Assume that muffins are incredibly addictive

##### Reference no: EM1320169

Q. A muffin stand lets consumers select among a menu of three pricing options:

(a) A monthly subscription fees of \$200 also a price every muffin of \$4;

(b) A monthly subscription fee of \$300 also a price every muffin of \$3; or

(c) A monthly subscription fee of \$900 also allows for unlimited amount of muffins at no additional cost.

Assume that muffins are incredibly addictive, so consumers have perfectly inelastic demand for them, up to a certain saturation point. In Illustrate what range of muffins every month would that saturation point need to be for a consumer to select pricing option b?

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