How can a warranty at the seller's expense signal that a product is high quality?
What will be an ideal response?
If the product is low quality, the warranty would be very costly for the seller to uphold. Low quality products would need numerous repairs for which the seller would be required to pay. Thus, warranties are not likely to be offered on low quality products.
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We know the following about a tie manufacturer: tie sales $1,300, cotton purchases $750, wages $400, interest on business loans $100, and profits $50. What is the contribution to GDP of this producer using the income approach?
A) $550 B) $500 C) $450 D) $400
In New York City, you need a license to drive a taxicab. Each license is valid for three years, and then it expires. The holder of a license can expect to earn $10,000 in profit each year. If the interest rate is 5 percent (0.05) per year, what is the value of a newly issued taxicab license? (Assume that each year's profit is received at the end of the year.)
a. $1,990.74 b. $10,000.00 c. $14,074.07 d. $27,232.48 e. $30,000.00
In the long run in a competitive market,
a. existing firms can increase their plant size, and new firms can enter the market b. existing firms can increase their plant size, but the number of firms is the market is fixed c. new firms can enter the market, but existing firms cannot vary their plant size d. new firms can enter the market, but only if existing firms decrease their plant size in the short run e. existing firms can increase their plant size, only if some other firms exit
A technological improvement in the production of good X causes the:
A. demand curve for X to shift to the right. B. demand curve for X to shift to the left. C. supply curve for X to shift to the right. D. supply curve for X to shift to the left.