If a customer values good A at 15, and it costs the firm 10 to ...

[karateprodigy]

If a customer values good A at 15, and it costs the firm 10 to produce, the firm can increase its profits if
 a. Redesign the product such that it delivers 16 in customer value
  b. Redesign the production process so that the costs fall to 9
 c. One or both of the above
 d. None of the above

Question 2

Adverse selection happens because
 a. One of the parties has more information about itself then the other party
 b. Individuals that the principle want to least select are the ones more likely to apply
  c. Parties most likely to accept an offer would be least qualified
 d. All of the above

[mammy1697]

Answer to Question 1

c

Answer to Question 2

d

[karateprodigy]

Excellent

[amandanbreshears]

Gracias!