The supply of used high-quality motorcycles is Qu=0.2PH- 1,000, while the supply of used low-quality motorcycles...

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The supply of used high-quality motorcycles is Qu=0.2PH- 1,000, while the supply of used low-quality motorcycles is Q, = 0.5P- 1,000. In the used-motorcycle market, potential buyers cannot distinguish the difference between a high-quality and low-quality motorcycle. Consumers value high-quality motorcycles at $10,000 and low-quality motorcycles a $6,000. If consumers believe there is a 50% probability that a used motorcycle is hig quality, what price are consumers willing to pay for any used motorcycle? b. At the price determined in part a, how many high-quality and low-quality motorcycle be offered for sale? What will happen over time to the consumers' willingness to pay used motorcycles? a. The supply of used high-quality motorcycles is Qu=0.2PH- 1,000, while the supply of used low-quality motorcycles is Q, = 0.5P- 1,000. In the used-motorcycle market, potential buyers cannot distinguish the difference between a high-quality and low-quality motorcycle. Consumers value high-quality motorcycles at $10,000 and low-quality motorcycles a $6,000. If consumers believe there is a 50% probability that a used motorcycle is hig quality, what price are consumers willing to pay for any used motorcycle? b. At the price determined in part a, how many high-quality and low-quality motorcycle be offered for sale? What will happen over time to the consumers' willingness to pay used motorcycles? a.

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a Price that consumers are willing to pay for used motor... View the full answer