Suppose a consumer has determined that her reservation price, R, is $75. The expected benefit of an additional search at this reservation price is $25. Based on this information we can conclude that:

A. this consumer will accept any price below $75.
B. search costs are $25 per search.
C. search costs are $25 per search, and this consumer will accept any price below $75.
D. this consumer will reject any price above $25.


Answer: C

Economics

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