Consider a non-sequential search model in which there are two firms selling a homogenous productat a marginal cost of c=1. Consumer's valuation is v=6 and consumers' search costs are uniformlydistribution between 0 and /bar (s), where /bar (s)=1.
a. Show that the equilibrium share of consumers searching twice is λ=0.49.
b.What is the average price in this market?