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 consumer will search again if her marginal cost of searching is constant and is:

A) strictly higher than $3.
B) lower than or equal to $0.75.
C) between $1.00 and $2.25.
D) exactly $0.