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Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and$3,000 for a lemon ...

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1 months ago

Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay $5,000 for a plum (high-quality) used car and$3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cameras in the market are lemons (low quality), what is consumers' willingness to pay ($X)? ▸$5,000

▸ $3,400 ▸$3,000

▸ $1,700 Textbook Survey of Economics: Principles, Applications and Tools Edition: 6th Authors: Read 227 times 10 Replies Replies Answer verified by a subject expert wrote... Posts: 225 1 months ago  Sign in or Sign up in seconds to unlock everything. Related Topics wrote... 1 months ago  Thank you, thank you, thank you! wrote... 1 months ago  You're welcome wrote... 1 months ago  Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay$5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cameras in the market are lemons (low quality), how many plums will be supplied in the market?▸ 30▸ 40▸ 70▸ 120  all is normal wrote... 1 months ago  40 wrote... 1 months ago  Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay$5,000 for a plum (high-quality) used car and $3,000 for a lemon (low-quality) used car. If buyers believe that 80% of used cameras in the market are lemons (low quality), what percent of used cars sold will actually be plums?▸ 20%▸ 25%▸ 33.33%▸ 75% wrote... 1 months ago  20% wrote... 1 months ago  Thanks wrote... 1 months ago  Figure 14.5 represents the market for used cars. Suppose buyers are willing to pay$5,000 for a plum (high-quality) used car and \$3,000 for a lemon (low-quality) used car. Initially buyers believe that 80% of used cameras in the market are lemons (low quality). Compared to the outcome with these initial expectations, how many fewer cars are sold in equilibrium?▸ 50▸ 80▸ 110▸ The number of cars sold in equilibrium is the same as the outcome with neutral expectations.
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1 months ago
 The number of cars sold in equilibrium is the same as the outcome with neutral expectations.