dish for another or reduce the price of the bill if the customer is not satisfied.

The rationale for these policies is that firms want repeat customers, who in turn will recommend the business

to others. As such, establishing a good reputation is of paramount importance. When buyers know that a firm

is concerned about its reputation, they are less likely to worry about receiving a poor-quality product. For

example, a well-established grocery store with a good reputation can often charge a higher price than a

temporary stand at a local farmer’s market, where the buyer may never see the seller again.

Sellers of labor provide information through resumes, recommendations, school transcripts, and examples of
their work. The labor market also uses occupational licenses to establish quality in the labor market.

Occupational licenses, which government agencies typically issue, show that a worker has completed a certain
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