A Car Sells at Different Prices at Different Dealerships in a Local

question 152

Multiple Choice

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.

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Definitions:

Commerce

The activity of buying and selling of goods and services, especially on a large scale, involving transportation and trade between parties.

Context

The circumstances or background information surrounding a situation, event, or communication that helps give it meaning.

Community

A group of people living in the same place or having a particular characteristic in common, sharing interests, values, or goals.

Content

The information or experience that is directed towards an end-user or audience, especially in digital media.