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 and that used cars are pure experience goods. Peaches are worth $10,000, and lemons are worth $6,000. Three fourths of all used cars are peaches, and one fourth are lemons. In a market with no signals, for instance, a market without warranties, the average value of cars actually sold will be

A) $6,000.
B) $7,000.
C) $9,000.
D) $10,000.