Solve both questions 4.The market for used sea kayaks has both a high-quality andlow-quality variety. High-quality kayaks are valued at $3,000and low-quality ones at $800. Supply of used high-qualitykayaks is QH = 0.5PH- 1,000, and the supply of used low-qualitykayaks is QL = PL - 500. Potential buyers cannot distinguishbetween a high-quality and a low-quality used kayak. Buyersbelieve that only 3 of every 10 used kayaks are of high quality.In this market,low-quality used kayaks will be sold.2,0009602702Consumers value high-quality dirt bikes at $6,000 and low-quality dirt bikes at $2,500. The supply of used high-quality dirtbikes is QH = 0.5PH-2,000, while the supply of used low-qualitydirt bikes is QL = PL – 1,000. Potential buyers cannot distinguishbetween the two. Buyers base their willingness to pay on the%D%3Dbelief that half the used dirt bikes are high quality. At thebuyers' willingness to pay, sellers will offerlow-quality ones.high-qualitybikes and2,000; 2,0003,000; 1,500125; 3,250450; 900

Dear Student as you have posted multiple questions but we can answer only 1 question at a time…

The market for used sea kayaks has both a high-quality and low-quality variety. High-quality kayaks are valued at $3,000 and low-quality ones at $800. Supply of used high-quality kayaks is QH = 0.5PH-1,000, and the supply of used low-quality kayaks is QL = PL – 500. Potential buyers cannot distinguish between a high-quality and a low-quality used kayak. Buyers believe that only 3 of every 10 used kayaks are of high quality. In this market, %3D low-quality used kayaks will be sold. O 2,000 960 O 270

The market for used sea kayaks has both a high-quality and low-quality variety. High-quality kayaks are valued at $3,000 and low-quality ones at $800. Supply of used high-quality kayaks is QH = 0.5PH-1,000, and the supply of used low-quality kayaks is QL = PL – 500. Potential buyers cannot distinguish between a high-quality and a low-quality used kayak. Buyers believe that only 3 of every 10 used kayaks are of high quality. In this market, %3D low-quality used kayaks will be sold. O 2,000 960 O 270

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Solve both questions

4.The market for used sea kayaks has both a high-quality and
low-quality variety. High-quality kayaks are valued at $3,000
and low-quality ones at $800. Supply of used high-quality
kayaks is QH = 0.5PH- 1,000, and the supply of used low-quality
kayaks is QL = PL - 500. Potential buyers cannot distinguish
between a high-quality and a low-quality used kayak. Buyers
believe that only 3 of every 10 used kayaks are of high quality.
In this market,
low-quality used kayaks will be sold.
2,000
960
270
2Consumers 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 QL = PL – 1,000. Potential buyers cannot distinguish
between the two. Buyers base their willingness to pay on the
%D
%3D
belief that half the used dirt bikes are high quality. At the
buyers' willingness to pay, sellers will offer
low-quality ones.
high-quality
bikes and
2,000; 2,000
3,000; 1,500
125; 3,250
450; 900

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