Principles of Microeconomics / Unit 15 MIC 1402 short lesson, about 20 seconds
Price as a Signal of Quality
Captions available
The idea
When quality cannot be seen, buyers read it from price: a cut can lower sales and a rise raise them, against the law of demand, within limits. Markets with few traders are thin.
In practice
The cheapest used car carries the most risk.
Where people slip
Reputable dealers charge more and fix hidden faults to keep repeat buyers; the premium buys information.
Your place on the trail
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Unlocks
- Nothing yet depends on this.
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