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Home Q & A Board Other Fields Homework Help Business Economics
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sinerus sinerus
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7 years ago
You are responsible for purchasing 25 used cars for your company. Star Brand cars costs $7,500 and Diamond Brand cars cost $6,000. Based on experience, you believe that 20% of Star Brand cars are lemons (low quality) while 40% of Diamond Brand cars are lemons (low quality). You are willing to pay $5,000 for a known lemon and $12,000 for a known plum. Which brand do you purchase?
A) Diamond
B) Star
C) indifferent between brands
D) don't buy either brand
Textbook 
Survey of Economics: Principles, Applications and Tools

Survey of Economics: Principles, Applications and Tools


Edition: 6th
Authors:
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Lightman030Lightman030
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7 years ago
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sinerus Author
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