A simple model of information acquisition for shopping predicts that, the larger the percentage of dealers in an area seen by the typical shopper, the _____ will be the dispersion of the prices _____ relative to their average.
A)larger; the buyers pay
B)larger; the dealers quote
C)smaller; the buyers pay
D)smaller; the dealers quote

Question

Quizplus · Accepted Answer

The model suggests that as shoppers see more dealers, they gather more information, leading to less variation in the prices quoted by dealers.

A Simple Model of Information Acquisition for Shopping Predicts That