Compute a buyers maximum willingness to pay for a car

Assignment Help Project Management

Reference no: EM131180523

Suppose 100 cars will be offered on the used-car market, 50 of them good cars, each worth $10,000 to a buyer, and 50 of them lemons, each worth $2,000.

a. Compute a buyer's maximum willingness to pay for a car if he or she cannot observe the car's type.

b. Suppose that there are enough buyers that competition among them leads cars to be sold at their maximum willingness to pay. What would the market equilibrium be if sellers value good cars at $8,000? At $6,000?

Reference no: EM131180523

Questions Cloud

Evaluate the effectiveness of the environmental security : Evaluate the effectiveness of the physical and environmental security measures that the organization you researched used in regard to protecting its assets.

What are the technologies available in big data : You are required to select an (one) application of Big Data in Supply Chain/logistics, Healthcare, Insurance, Marketing, Finance etc. of your choice. How to select the right Big Data application for your business, project and desired outcomes. Wh..

Compute a buyers maximum willingness to pay for a car : Compute a buyer's maximum willingness to pay for a car if he or she cannot observe the car's type.- What would the market equilibrium be if sellers value good cars at $8,000? At $6,000?

How to protect a computer and business against their threat : Security goes hand-in-hand with developing effective Excel applications. As an Excel user, it is necessary to learn more about macro viruses and how to protect a computer and business against their threat.

Create a program which converts fahrenheit to celsius : Create the following program which converts Fahrenheit to Celsius. Read integer Fahrenheit temperatures from the user. You need to check whether the input is the correct one or not. If the user enters the incorrect number, ask it again.

What is the equilibrium wage they would pay : If competitive firms have no signals available, what is the equilibrium wage they would pay?- Under what conditions on the cost of getting an education for each type, cL and cH, is there a separating equilibrium?

What is the nash equilibrium of the second stage game : What is the Nash equilibrium of the second stage game if the entrant enters? Solve the game for each type of incumbent.

What is the sustainable growth rate : Your firm has sales of $10,000,000, net income of $800,000, total assets of $10,000,000, and equity of $4,000,000. Your firm projects an increase in sales of 15 percent and has a dividend payout ratio of 40 percent? What is the sustainable growth rat..

User Account

All Pages