A5Some online retailers include free shipping while others charge for shipping. In July 2006, bajangles.com offered a Sony 60-inch rear projection TV for $2,968.99 with free shipping, while MB superstore offered the same TV for $2,692.95 with shipping charge of $299.50 to Alaska. (a) Using relevant demand and supply curves, explain whether it matters for consumers if the retailer offers free shipping or charges for shippin (b) If consumers view bajangles.com and MB superstore as equivalent (in terms of quality of service), how should their prices for the same TV compare? Are the prices consistent with your answer in (a (c) If consumers are biased in decision-making by anchoring, how would that affect your answer in (a)?)?g.
A5Some online retailers include free shipping while others charge for shipping. In July 2006, bajangles.com offered a Sony 60-inch rear projection TV for $2,968.99 with free shipping, while MB superstore offered the same TV for $2,692.95 with shipping charge of $299.50 to Alaska.
(a) Using relevant demand and supply
(b) If consumers view bajangles.com and MB superstore as equivalent (in terms of quality of service), how should their prices for the same TV compare? Are the prices consistent with your answer in (a
(c) If consumers are biased in decision-making by anchoring, how would that affect your answer in (a)?)?g.
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