Asymmetric information in the market for used cars

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Reference no: EM131203605

Suppose that there is asymmetric information in the market for used cars. Sellers know the quality of the car that they are ?selling but buyers do not. Buyers know that there is a 5050?% chance of getting a? "lemon", a low quality used car. A high quality used car is worth? $30,000, and a low quality used car is worth? $15,000. Based on this ?probability, the most that a buyer would be willing to pay for a used car is ?$ nothing. ?(Enter your response rounded to the nearest? dollar.)

Reference no: EM131203605

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