Suppose That There Are Only Two Types of Used Cars

Multiple Choice

Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth $10,000, and lemons are worth $4,000. If the market is such that only lemons are sold, then used cars are

A) experience goods and the used car market has effective signals.
B) experience goods and the used car market lacks effective signals.
C) not experience goods and the used car market has effective signals.
D) not experience goods and the used car market lacks effective signals.