Consumers value high-quality dirt bikes at $6,000 and low- quality dirt bikes at $2,500. The supply of used high-quality dirt bikes is QH = 0.5PH - 2,000, while the supply of used low-quality dirt bikes is Q₁ = P₁ - 1,000. Potential buyers cannot distinguish between the two. Buyers base their willingness to pay on the belief that half the used dirt bikes are high quality. At the buyers' willingness to pay, sellers will offer high-quality bikes and low-quality ones. O2,000; 2,000 O 3,000; 1,500 125; 3,250 450; 900

Consumers value high-quality dirt bikes at $6,000 and low- quality dirt bikes at $2,500. The supply of used high-quality dirt bikes is QH = 0.5PH - 2,000, while the supply of used low-quality dirt bikes is Q₁ = P₁ - 1,000. Potential buyers cannot distinguish between the two. Buyers base their willingness to pay on the belief that half the used dirt bikes are high quality. At the buyers' willingness to pay, sellers will offer high-quality bikes and low-quality ones. O2,000; 2,000 O 3,000; 1,500 125; 3,250 450; 900

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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