A car sells at different prices at different dealerships in an oligopolistic market. If a consumer has imperfect information about the price of a car at each dealership, he should
a. always gather all available information about prices.
b. gather information about prices until the expected marginal utility of more information equals the marginal cost of gathering it.
c. gather information about prices only if it can be gathered without cost.
d. ignore information about prices because it is irrelevant to making an "optimally imperfect" decision.
b
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Explain how our standard of living depends upon our level of real GDP per person, but there might not be a one-to-one relationship between the standard of living and real GDP per person. Give examples of things that can affect one, but not the other
What will be an ideal response?
Suppose a monopolistic competitor produces 1,250 units of a good in equilibrium and charges a price of $7.50 for each unit. If the average total cost of producing 1,250 units of the good is $8, what is the total loss incurred by the producer?
A) $0.50 B) $500 C) $625 D) $1.50