Initially, the market has many souvenir shops, each of which charges (p_{m}) (because consumers do not know

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Initially, the market has many souvenir shops, each of which charges \(p_{m}\) (because consumers do not know the shops' prices), and buyers' search costs are \(c\). If the government pays for half of consumers' search costs, is a single-price equilibrium at a price less than \(p_{m}\) possible?

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Microeconomics

ISBN: 9781292215624

8th Global Edition

Authors: Jeffrey Perloff

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