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5 . Tamika and Catalina work as plumbers, each serving the same neighborhood. Tamika is a careful worker who utilizes the best replacement parts on

5. Tamika and Catalina work as plumbers, each serving the same neighborhood. Tamika is a careful worker who utilizes the best replacement parts on her jobs. Catalina worries less about the quality of her jobs. She tries to complete them quickly and often uses low-cost replacement parts. Tamika believes that if customers knew the quality of her work, she could charge $100 for a typical job. If customers recognized that Catalinas work was of lower quality, she would be able to charge only $60 for a typical job. Because customers cannot judge the quality of the two plumbers work, they consider it equally likely that the work is high quality (i.e., a $100 job) or low quality (i.e., a $60 job). Thus, both Tamika and Cataline are able to charge $80 for a typical job. Recently, Tamika placed an advertisement in the local paper emphasizing the high quality of her work. She was angered and dismayed when Catalina placed a similar advertisement the following week. (30 points)
a. Describe the problem Tamika faces in economic terms, using the specific concepts and language discussed in class. Do you expect that Tamikas advertisement will help her to better compete with Catalina? Why or why not?

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