What is the fundamental difference between the two markets

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Consumer Reports. You want to buy a used car, specifically a 1999 Zephyr. According to Consumer Reports, half the 1999 Zephyrs now on the road are lemons, meaning they break down frequently and generate large repair bills. Consumers are willing to pay $2,000 for a lemon, but $5,000 for a plum. According to Ms. Wizard, The equilibrium price of used 1999 Zephyrs will be $2,000 in Sourland but $2,600 in Sweetland.

a. Illustrate with a complete graph for each market.

b. What is the fundamental difference between the two markets?

Reference no: EM131134703

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