Business, 26.07.2019 01:30 twil85459

Arisk-neutral consumer is deciding whether to purchase a homogeneous product from one of two firms. one firm produces an unreliable product and the other a reliable product. at the time of the sale, the consumer is unable to distinguish between the two firms’ products. from the consumer’s perspective, there is an equal chance that a given firm’s product is reliable or unreliable. the maximum amount this consumer will pay for an unreliable product is $0, while she will pay $210 for a reliable product. a. given this uncertainty, what is the most this consumer will pay to purchase one unit of this product

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Arisk-neutral consumer is deciding whether to purchase a homogeneous product from one of two firms....

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