This graph illustrates the marginal costs and marginal benefits of acquiring information before making a major purchase. Suppose the marginal cost and marginal benefit curves were MC₀ and MB₀ several decades ago. However, because information about this product is now available online, the:

Question

Quizplus · Accepted Answer

With the availability of information online, the marginal cost of acquiring information has decreased while the marginal benefit of acquiring information has remained the same. As a result, the optimal amount of information will increase as individuals can now acquire more information at a lower cost, leading to better decision-making.

This Graph Illustrates the Marginal Costs and Marginal Benefits of Acquiring