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Lighting2551 Lighting2551
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Discovered price$120$105$110
Probability of discovering a lower price in next visit  0.50   0.125 0.25
Best guess of a lower price$110$102.50$105
Best guess of savings from a lower price          
Marginal benefit: Expected savings          

Table 14.5

Table 14.5 contains data on the marginal benefit of searching for a lower price for a digital camera.
The price of the camera ranges from $100 at the lowest price store to $140 at the highest price store.
For any randomly selected store, any price from the low price to the high price is equally likely.
The marginal cost of visiting each store is constant at $1.50 per visit.


Refer to Table 14.5. At the discovered price of $120, the best guess of savings from a lower price is:

▸ $2.50.

▸ $5.

▸ $10.

▸ $20.
Textbook 
Microeconomics: Principles, Applications, and Tools

Microeconomics: Principles, Applications, and Tools


Edition: 8th
Authors:
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jrhome1985!jrhome1985!
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Lighting2551 Author
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Thank you
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