onsider a used car market. There is a fraction of p lemons, a fraction of q lemons plus, and a fraction of -p-q peaches. Used car sellers value peaches at $200k, lemons plus at $150k and lemons at $100k. Ised car buyers value peaches at $240k, lemons plus at $170k and lemons at $120k. The seller of the car nows the type of the cars and the potential buyer does not. Suppose p=0.2, q=0.4, what are the market

onsider a used car market. There is a fraction of p lemons, a fraction of q lemons plus, and a fraction of -p-q peaches. Used car sellers value peaches at $200k, lemons plus at $150k and lemons at $100k. Ised car buyers value peaches at $240k, lemons plus at $170k and lemons at $120k. The seller of the car nows the type of the cars and the potential buyer does not. Suppose p=0.2, q=0.4, what are the market

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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