Many People Buy Used Smartphones from EBay, Craigslist, and So

Essay

Many people buy used smartphones from eBay, Craigslist, and so on. Some of these phones are good quality, but many others are not, and customers often have a difficult time distinguishing between the two types. Good smartphones are valued at $400 and poor ones at $100. The supply of good smartphones is given by Q_H = 2P_H - 300; that of poor smartphones is given by Q_L = 4P_L - 100. If consumers believe that 40% of used smartphones are good quality, then the expected price of a used smartphone is _____. At that price, _____ good smartphones and _____ poor ones will be sold, making the actual likelihood of buying a good phone equal to _____.