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-The Market for Used Cars Is Shown in the Above

Question 7

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  -The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Forty percent (40%) of all cars are lemons.However,sellers can switch to selling lemons at lower costs.Which of the following statements is TRUE? A) Only lemons are sold for $1,600. B) Only lemons are sold for $800. C) All the sellers of good cars will switch to selling lemons. D) 40% buyers will get lemons.
-The market for used cars is shown in the above figure.Buyers cannot tell whether any given car is a lemon.Forty percent (40%) of all cars are lemons.However,sellers can switch to selling lemons at lower costs.Which of the following statements is TRUE?


A) Only lemons are sold for $1,600.
B) Only lemons are sold for $800.
C) All the sellers of good cars will switch to selling lemons.
D) 40% buyers will get lemons.

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