If there is zero search cost,then in the presence of asymmetric information,competitive firms will
A) charge the monopoly price.
B) charge the competitive price.
C) charge zero price.
D) shut down.

Question

Quizplus · Accepted Answer

With zero search cost, consumers can easily find and compare prices from all competing firms. As a result, firms cannot charge a monopoly price as consumers will simply choose to buy from a competitor who offers a lower price. Instead, firms will have to charge the competitive price in order to remain in business and attract customers.

If There Is Zero Search Cost,then in the Presence of Asymmetric