Price dispersion for a product falls when:
A)consumers search less.
B)consumers are uninformed.
C)the benefits received by consumers from search are higher than the costs.
D)the cost of acquiring price information is very high.

Question

Quizplus · Accepted Answer

Price dispersion occurs when the same product is sold at different prices in different markets. If the benefits received by consumers from searching for a lower price are higher than the costs of searching, consumers are more likely to engage in search behavior. As more consumers search, price dispersion falls. Therefore, when the benefits received by consumers from search are higher than the costs, price dispersion falls.

Price Dispersion for a Product Falls When