3.3 Sometimes a firm sells the same product under two brand names at different prices. For example,...

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3.3 Sometimes a firm sells the same product under two brand names at different prices. For example, although the Chevy Tahoe and the GMC Yukon are virtually twins, the 2014 Yukon sells for $1,355 more than the 2014 Tahoe. Give an asymmetric information explanation as to why the firm might use pairs of brand names and why one product might sell for more than the other.

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Microeconomics

ISBN: 9780133456912

7th Edition

Authors: Jeffrey M. Perloff

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