Unformatted text preview: lemon owners are willing to sell at a price of $19,000. a. If there is complete information, what price will cars be sold at? b. If there is asymmetric information, and cars are sold at $20,000, what is the value of d ? c. What happens to the price of cars as d goes up? Why? d. Suppose that d = 0.5. What will happen? Why? Solution can be shown in class or during student office hours in my office...
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- Fall '11