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QUESTION

The automobile makers Mercedes-Benz and Kia were considering entering a developing country.

The automobile makers Mercedes-Benz and Kia were considering entering a developing country. Prior to entering, a survey of consumers in this developing country indicated that consumers prefer Mercedes-Benz automobiles over Kia automobiles. However, after the two automobile makers entered the country and began sales of their vehicles, consumers flocked to Kia dealerships. How can you explain this apparent paradox? (Hint: think about the data needed to infer a consumer's optimal bundle choice and the data provided here.)

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