Let K = search costs, P₂ = the second possible price for an iPhone, and E(P) = the average iPhone price in the market. If K

Question

Let K = search costs, P₂ = the second possible price for an iPhone, and E(P) = the average iPhone price in the market. If K < P₂ < E(P), then the decision maker's opportunity cost of time is
A) normal
B) high
C) astronomical

Quizplus · Accepted Answer

The opportunity cost of time is normal when the search costs are less than the second possible price, which is less than the average market price.

Let K = Search Costs, P₂ = the Second Possible