Multiple Choice
Suppose that there are two types of cars,good and bad.The qualities of cars are not observable but are known to the sellers.Risk-neutral buyers and sellers have their own valuation of these two types of cars as follows:
When a buyer does not observe the quality,what is the highest price she will offer for a used car if she ignores adverse selection?
A) $2,500
B) $3,000
C) $4,000
D) $4,500
Correct Answer:

Verified
Correct Answer:
Verified
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