Multiple Choice
Suppose that sellers value a good car at $10,500 and a bad car at $5,500,and quality is not observed by the buyers.What is the highest price that risk-neutral buyers will offer for a used car if they ignore adverse selection when 60 of the cars are good?
A) $5,500
B) $8,000
C) $8,500
D) $10,500
Correct Answer:
Verified
Correct Answer:
Verified
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