In the Tourist-Trap Model,a Consumer Might Pay More Than the Marginal

question 118

Multiple Choice

In the tourist-trap model,a consumer might pay more than the marginal cost for a good sold in a competitive market because

• A) the consumer is not free to search for lower prices.
• B) souvenir stores are part of a nationwide cartel.
• C) the cost of searching for a cheaper good is more than the markup over the marginal cost.
• D) the difference in prices between stores will be smaller than the search cost.

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Definitions:

Partnership Debts

Financial obligations or liabilities that are the shared responsibility of all partners within a partnership.

Duty To Serve

An obligation, often seen in utilities and public services, requiring companies to offer services to all customers within a given area, despite the possible financial loss involved.

Limited Liability Partnerships

Limited Liability Partnerships (LLPs) are partnerships in which some or all partners have limited liabilities, meaning they are not personally responsible for the partnership's debts.

Contractual Obligation

An agreement that legally binds two or more parties to specific actions or non-actions.