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Suppose That There Are Only Two Types of Used Cars,peaches

Question 3

Multiple Choice

Suppose that there are only two types of used cars,peaches and lemons.Peaches are worth $10,000,and lemons are worth $6,000.Three fourths of all used cars are peaches,and one fourth are lemons.In a market with no signals,for instance,a market without warranties,the average value of cars actually sold will be


A) $6,000.
B) $7,000.
C) $7,500.
D) $9,000.
E) $10,000.

Correct Answer:

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