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You Experiment by Offering Free Warranties for Your Product in Market

question 16

Multiple Choice

You experiment by offering free warranties for your product in market A but not in market B.Sales in A rise from 240 to 360 units per week while sales in B rise from 410 to 430.The Difference-in-difference estimate of the effect of the free warranty is:


Definitions:

Marginal Product

The additional output resulting from the use of one more unit of a productive resource.

Market Wage Rate

The prevailing rate of pay offered for a certain job in the labor market, which can vary based on location, industry, and job requirements.

Bricklayers

Tradespeople who lay bricks to construct brickwork. This involves setting bricks in mortar to build walls, partitions, chimneys, and other structures.

Equilibrium Market Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded.

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