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Natalie wants to buy a watch for her boyfriend as a gift, and the lowest price she has found so far is $540. Natalie thinks

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Natalie wants to buy a watch for her boyfriend as a gift, and the lowest price she has found so far is $540. Natalie thinks one-fifth of the stores charge $660 for a watch, one-fifth charge $540, one-fifth charge $420, one-fifth charge $360, and one-fifth charge $240. (a) Calculate the expected benefit of an additional search for Natalie. Should Natalie continue to search if her search cost is $80 per search? (b) Briefly explain how the reservation price of Natalie will change, when the stores are spread all over the town, instead of the stores are located in a mall

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