Suppose 100 cars will be offered on the used-car market, 50 of them good cars, each worth
Question:
a. Compute a buyer's maximum willingness to pay for a car if he or she cannot observe the car's type.
b. Suppose that there are enough buyers that competition among them leads cars to be sold at their maximum willingness to pay. What would the market equilibrium be if sellers value good cars at $8,000? At $6,000?
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Related Book For
Intermediate Microeconomics and Its Application
ISBN: 978-0324599107
11th edition
Authors: walter nicholson, christopher snyder
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