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4 weeks ago



Figure 14.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. If buyers believe that 50% of used digital cameras in the market are lemons (low quality), what is consumers' willingness to pay ($W)?

▸ $100

▸ $200

▸ $300

▸ $400
Textbook 
Survey of Economics: Principles, Applications and Tools
Edition: 6th
Authors:
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4 weeks ago
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$300
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Answer accepted by topic starter
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4 weeks ago



Figure 14.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. If buyers believe that 50% of used digital cameras in the market are lemons (low quality), how many plums will be supplied by sellers?

▸ 50

▸ 60

▸ 150

▸ 200
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50
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4 weeks ago
Thanks
Answer accepted by topic starter
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4 weeks ago



Figure 14.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. If buyers believe that 50% of used digital cameras in the market are lemons (low quality), what percent of used digital cameras sold will actually be lemons? (low-quality)?

▸ 25%

▸ 50%

▸ 75%

▸ 100%
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75%
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4 weeks ago



Figure 14.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. Initially buyers believe that 50% of used digital cameras in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer digital cameras are sold in equilibrium?

▸ 90

▸ 110

▸ 140

▸ The number of cameras sold in equilibrium is the same as the outcome with neutral expectations.
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4 weeks ago
140
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4 weeks ago
Thank you
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4 weeks ago
Welcome ツ
Answer accepted by topic starter
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4 weeks ago



Figure 14.4 represents the market for used 12 megapixel digital cameras. Suppose buyers are willing to pay $400 for a plum (high-quality) used digital camera and $200 for a lemon (low-quality) used digital camera. At any price between $X and $Z:

▸ only plums will be supplied.

▸ only lemons will be supplied.

▸ both plums and lemons will be supplied

▸ neither plums nor lemons will be supplied.
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only lemons will be supplied.
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