With asymmetric information among consumers and positive search costs,a firm may
A) raise its price above the monopoly price.
B) price at the monopoly level.
C) price at the full information competitive level.
D) None of the above.

Question

Quizplus · Accepted Answer

With asymmetric information and positive search costs, a firm can price at the monopoly level because consumers may not have enough information or incentive to search for better prices, allowing the firm to maintain higher prices without losing customers.

With Asymmetric Information Among Consumers and Positive Search Costs,a Firm