1. In Akerlof’s lemons problem, suppose that 5 cars are available with quality levels 0, 1, 2, 3, and 4. The sellers know the quality of the car while the buyers do not. If the sellers have a reservation price of $2,000 per unit of quality, and the buyers value cars at $3,000 per unit of quality, the equilibrium price per car will be: 
2. 
   
3. a. $2,000-$3,000. 
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5. b. $4,000-$6000.
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7. c. $8,000-$12,000. 
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9. d. No market will exist.

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