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You Want to Purchase a New Car

Question 5

Multiple Choice

You want to purchase a new car.You have gone to 3 dealerships that sell the type of car you want.The price of the car is different at each of the dealerships.You have estimated that if you go to another dealership,the marginal amount you may save will be $250,but the marginal cost of going to the dealership would be $350.Which of the following statements is accurate?


A) You should go to the next dealership, as you would be able to save an additional $250.
B) In order to determine whether or not you should go to the next dealership, you would need to know the total costs and total benefits of this action.
C) You should not go to the next dealership because the marginal cost of this action exceeds the marginal benefit.
D) You should continue going to dealerships as long as the marginal benefit of additional search is positive.

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