Some car dealers offer used cars for sale with warranties, Econometrics

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Some car dealers offer used cars for sale with warranties

1. Judy knows that her car is a lemon and offers it for sale. If the used-car market is working efficiently, will buyers know whether her car is a lemon? Why or why not?

2. Some car dealers offer used cars for sale with warranties and some offer them without warranties. Describe the equilibrium in the market for used cars. Is the market efficient?

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