According to the search model, the marginal benefit of acquiring information about a product is greater for expensive items than for cheap items.

Question

Quizplus · Accepted Answer

According to the search model, the cost of acquiring information is a constant, so the higher the price of the item, the greater the potential benefit of acquiring information. Therefore, the marginal benefit of acquiring information is greater for expensive items than for cheap items.

According to the Search Model, the Marginal Benefit of Acquiring