Figure 9.3 -Figure 9.3 Represents the Market for Used Refrigerators. Suppose Buyers

Multiple Choice

Figure 9.3
-Figure 9.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. Initially buyers believe that 50% of used refrigerators in the market are lemons (low quality) . Compared to the outcome with neutral expectations, how many fewer refrigerators are sold in equilibrium?

A) 50
B) 125
C) 175
D) 250