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Posts: 197
A month ago



Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of the used bikes are lemons (low quality), how much will they be willing to pay for a used bike?

▸ $50

▸ $80

▸ $125

▸ $200
Textbook 

Survey of Economics: Principles, Applications and Tools

Edition: 6th
Authors:
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Answer verified by a subject expert
wrote...
Posts: 237
A month ago
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$125
1
Related Topics
wrote...
A month ago



Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes are lemons (low quality), how many plums (high quality) will be supplied by sellers?

▸ 8

▸ 12

▸ 16

▸ 22
wrote...
A month ago
8
wrote...
A month ago
Thank you for answering so quickly
wrote...
A month ago
Was feeling bored, my pleasure Grinning Face with Smiling Eyes
wrote...
A month ago



Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes in the market are lemons (low quality), what fraction of used bikes sold will actually be lemons (low quality)?

▸ 8/30

▸ 8/22

▸ 22/30

▸ 30/30
wrote...
A month ago
22/30
wrote...
A month ago



Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers believe that 50% of used bikes in the market are lemons (low quality), what fraction of used bikes sold will actually be plums (high quality)?

▸ 8/30

▸ 8/22

▸ 22/30

▸ 30/30
wrote...
A month ago
8/30
wrote...
A month ago
This site is awesome!
wrote...
A month ago
Slight Smile Good luck on the rest
wrote...
A month ago



Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. Initially buyers believe that 50% of used bikes in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer bikes are sold in equilibrium?

▸ 8

▸ 12

▸ 18

▸ 22
wrote...
A month ago
18
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