Suppose that everybody knows that 50% of stores in the market sell Number 2 pencils for $4

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Suppose that everybody knows that 50% of stores in the market sell Number 2 pencils for $4 a box, and 50% sell Number 2 pencils for $3 a box. If a consumer observes a price of $4, what is the expected benefit from an additional search?

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Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

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Posted Date: Mar 16, 2024 04:22 AM

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Suppose that everybody knows that 50% of stores in the market sell Number 2 pencils for $4

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To calculate the expected benefit from an additional search we need to consider the ... View the full answer

Intermediate Microeconomics

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