Consider a Used Car Market in Which Half the Cars

Multiple Choice

Consider a used car market in which half the cars are good and half are bad (lemons) .If buyers are rational, the prices being offered for used cars will result in

A) an equal proportion of a good cars and lemons being sold in an efficient market.
B) a larger proportion of good cars being sold and consequently, consumer surplus is increased.
C) a larger proportion of lemons being sold and consequently, producer surplus is increased.
D) an equal proportion of good cars and lemons being sold in an inefficient market.