A car sells at different prices at different dealerships in a local 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 benefit 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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If the total cost of producing 6 units is $228 and the total cost of producing 7 units is $245, what is the marginal cost of producing the seventh unit?
a. $35 b. $245 c. $3 d. $38 e. $17
Which of the following is uncharacteristic of monopolistic competition in the long run?
a. a large number of sellers in the industry b. zero economic profits c. price in excess of marginal cost d. firms have no excess capacity