Solution-Type of used cars-lemons or oranges

Type of used cars-lemons or oranges

Assignment Help Business Economics

Reference no: EM133133632

Consider the market for Citrus used car in which lemons account for 40% of the used cars offered for sale. Suppose that each owner of an orange Citrus values it at $12,000; he is willing to part with it for a price of at least $12,000, but not lower than this. Similarly, each owner of a lemon Citrus values it at $4,000. Suppose that potential buyers are willing to pay more for each type. If a buyer could be confi- dent that the car he was buying was an orange, he would be willing to pay $15,000 for it; if the car was a known lemon, he would be willing to pay $5,000.

Suppose that there are many buyers, but a limited number of used cars. What type of used cars - lemons or oranges - will be offered for sale in the market, and at what prices?

Reference no: EM133133632

Questions Cloud

Producing beans and whiskey : Two countries are capable of producing beans and whiskey. The first country, Absurdistan, can produce beans at a cost $15.00 per ton, and whiskey at a cost of $

Contrast the consensus and conflict models of law and crime : Compare and contrast the consensus and conflict models of law and crime. Which model most closely fits with the ideological underpinnings of the U.S. justice sy

What is the amount of operating income for abc : The data includes all the elements from Cecil income statement: Selling and Administrative Expenses $1,000. What is the amount of operating income

How will mass closings of businesses across the country : 1. How will mass closings of businesses across the country affect the economy as a whole?

Type of used cars-lemons or oranges : Suppose that there are many buyers, but a limited number of used cars. What type of used cars - lemons or oranges - will be offered for sale in the market, and

Broad categories of ideological explicitness : Explain the three broad categories of ideological explicitness as it pertains to film and list at least one example for each category.

Describe the standard cycle of the process of growth : Describe the standard cycle of the process of growth from a portion of current income being saved to that savings ultimately increasing future income.

Language or processing disorder : Explain how to make sure you are assessing student learning rather than a language or a processing disorder.

Compare-contrast solow savings model for growth : Compare/contrast Solow's savings model for growth, with Harrod-Domar's perspective on how savings promotes economic growth.

User Account

All Pages

Type of used cars-lemons or oranges

Reference no: EM133133632

Reference no: EM133133632

Questions Cloud

Reviews

Write a Review

Business Economics Questions & Answers

Economics assignment

Demand and supply curves

Long-run perfectly competitive equilibrium for the firm

Supply and demand diagrams

Case study: fisher-price toys

Draw the production possibility curve

Tax revenue

Maximize total welfare

Difference between the cv and the ev

Depict von neumann-morgenstern utility index u in a diagram

What is the market solution

Calculate gross national product and net national product

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT