At a swap meet, 10 sellers each have a used 5.7-L Chevy engine for sale. Half the engines are in mint condition, with each valued by its seller at $3,000. The other engines need repair, and each is valued by its seller at $1,000. Buyers value a mint engine at $3,500 and an engine that needs repair at $1,600. Sellers know whether their engine is in mint condition or needs repair, and buyers can distinguish between engines in mint condition and those needing repair. How many engines will be sold at the swap meet?
A) zero
B) 10
C) five mint engines and none that need repair
D) no mint engines and five that need repair

Question

Quizplus · Accepted Answer

Given that buyers can distinguish between engines in mint condition and those needing repair, and since the buyers' valuation exceeds the sellers' valuation for both types of engines, all 10 engines will be sold. Buyers are willing to pay more than the asking price for both mint ($3,500 vs. $3,000) and repair-needed engines ($1,600 vs. $1,000), leading to a market where all engines find a buyer.

At a Swap Meet, 10 Sellers Each Have a Used