Exhibit 14.3

-Refer to Exhibit 14.3,which shows the marginal cost and the marginal benefit of information curves.If a consumer gathers an amount of information equal to I₂,it implies that _____

Question

Exhibit 14.3 -Refer to Exhibit 14.3,which shows the marginal cost and the marginal benefit of information curves.If a consumer gathers an amount of information equal to I₂,it implies that _____

Quizplus · Accepted Answer

At I₂, the marginal benefit of information is equal to the marginal cost of information. This means that the consumer has found the optimal balance between the cost and benefit of acquiring information, and has made the best choice. Any further search would increase the marginal cost of information and decrease the marginal benefit, leading to a suboptimal outcome. Therefore, the consumer has made the optimal search.

Exhibit 14.3 -Refer to Exhibit 14.3,which Shows the Marginal Cost and the Marginal