Consider a Consumer Who Is Searching for the Lowest Price

Multiple Choice

Consider a consumer who is searching for the lowest price for good X.The consumer knows that 75 percent of the time she will find a store charging $10 and 25 percent of the times she will find a store charging $7.The expected benefit from an additional search is:

A) $3.
B) $0.75.
C) $2.25.
D) $0.