Assume That the Value of a High-Quality Used Phone of a Particular

Multiple Choice

Assume that the value of a high-quality used phone of a particular model is $200. The value of a low-quality model of the same used phone is $100. Assume that 15% are low-quality models and 85% of them are high quality. What will be the case in the market for used phones of that model?

A) Fewer than 15% of the buyers will expect low quality.
B) Fewer than 15% of the sellers will charge low price.
C) Fewer than 15% of the phones sold will be low quality.
D) More than 15% of the phones sold will be low quality.