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Suppose Buyers in the Used Car Market Are Willing to Pay

Question 148

Multiple Choice

Suppose buyers in the used car market are willing to pay $4,000 for a plum (high-quality) used car and $2,000 for a lemon (low-quality) used car. If buyers believe that 50% of the used cars on the market are lemons (low quality) , what would they be willing to pay for a used car?


A) $2000
B) $3000
C) $3500
D) $4000

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