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"Buy 2, get 1 free."

Why is the "1 free" free to the buyer but not to society? At what point if any should the government regulate such promotions like these?

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Solution Summary

This solution reiterates the price of goods and when the government should step in to correct market failures.

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"Buy two, get one free" does not mean one is actually free. In economics, there is always some cost associated with everything. The question is just who bears the cost of the 'free' item. When a retail shop tries to increase sales by offering such a discount, it usually means that the price of the item is too high. Instead of selling one at a discount, they entice people to buy more than one by making the offer conditional on ...

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