Two types of used Fender Stratocaster guitars are available for sale: those made in the U.S.and those made in Mexico.It is impossible for the buyer to know which is which,but the seller knows.The value of a U.S.Stratocaster is $900 and the value of a Mexican Stratocaster is $400.The U.S.Stratocasters are 30% of Fender's production and the Mexican Stratocasters are 70% of production.No seller must sell a guitar for less than the guitar's value.
-Refer to the information above.Suppose that Fender discloses that a small stamp on the back of the guitar neck identifies its country of origin.Sellers of U.S.-made Stratocasters will now receive __________ because their claim of a U.S.-made Stratocaster is __________.

Question

Quizplus · Accepted Answer

With the disclosure of the stamp, buyers can now confirm if a guitar is made in the U.S. or Mexico. Therefore, sellers claiming to sell a U.S.-made Stratocaster must provide evidence of the stamp, and buyers would be willing to pay at least $900 for a genuine U.S.-made guitar.

Two Types of Used Fender Stratocaster Guitars Are Available for Sale