Sam’s search costs are $5 per search. He wants to buy a VCR for his wife for, and the lowest price he’s found so far is $300.

Sam’s search costs are $5 per search. He wants to buy a VCR for his wife for, and the lowest price he’s found so far is $300. Sam thinks 80 percent of the stores charge $300 for the VCR and 20 percent charge $200. Sam’s optimal decision is to: I) Continue to search for a lower price since the expected benefit of an additional search is $100, which exceeds his per-unit search costs. II) continue to search for a lower price since the expected benefit of an additional search is $20, which exceeds his per-unit search costs.III) stop searching and purchase the Wii for $300. IV) stop searching and postpone purchasing the Wii till prices fall. V) continue to search because shopping is fun and he is really buying the Wii for himself.

ASSIGNMENT CODE: 7701231Sam’s search costs are $5 per search. He wants to buy a VCR for his wife for, and the lowest pricehe’s found so far is $300. Sam thinks 80 percent of the stores charge…

 
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