When can a seller's investment in reducing transaction cost increase the price of the product to customers but still leave them better off?
When the seller tries to reduce transaction cost through informative advertising, the customer's cost of acquiring information reduces, thereby making them better off.
You might also like to view...
"Fluctuations in exchange rates, other things remaining the same, create a situation in which money buys the same amount of goods and services in different currencies
" What does the previous statement describe? Will these fluctuations occur in the short run or the long run?
After graduating from high school, Steve had the following three choices for his immediate future, listed in order of preference: (1) attend our campus, (2) work in a printed circuit board factory, or (3) attend a rival college. His opportunity cost of going to college here includes which of the following?
a. The cost of books and supplies at the rival college b. The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition, textbooks, etc.) c. The benefits he could have received from going to the rival college d. Only the tuition and fees paid for taking classes here e. Cannot be determined from the information given
Hannah's House of Hotcakes serves 30 customers in an hour when it hires one worker. It serves 60 customers in an hour when it hires two workers. The marginal product of the second worker is ________ customers served per hour.
A. 20 B. 30 C. 50 D. 67.5
Why is there a need for an aggregate demand and aggregate supply model of the economy? Why can’t the supply and demand model for a single product explain developments in the economy?
What will be an ideal response?