-The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Ten percent (10%) of all cars are lemons.Which of the following statements is true?

Question

-The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Ten percent (10%)of all cars are lemons.Which of the following statements is true?

Quizplus · Accepted Answer

Buyers cannot distinguish between lemons and good cars, so they may end up paying more than the actual value for lemons, which are worth less.

-The Market for Used Cars Is Shown in the Above