Why would Sunkist incur substantial costs to advertise and establish a brand name when the quality of its oranges can easily be evaluated by consumers?
What will be an ideal response?
Oranges might be considered as experience goods, whose quality in terms of taste and sweetness can be established only after consumption. Because of this characteristic, the Sunkist brand name can convey a signal of high quality to consumers.
Economics
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When we describe stock prices as following a random walk, we mean that future changes in stock prices are
A) unpredictable. B) increasing. C) decreasing. D) constant.
Economics
Suppose Eddie's demand curve for text messages is T = 150 - 500Pt, where T stands for the number of text messages and Pt represents the price of text messages. What is Eddie's consumer surplus if Pt = $0.05 per message?
A. $5.00 B. $7.81 C. $15.63 D. $31.25
Economics