What is the equilibrium price
Problem
Consider the used car market with imperfect information. There are 10 bad quality cars (lemons) and 12 good quality cars. The value of a bad car is $8,000 and the value of a good car is $20,000. What is the equilibrium price?
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Consider the used car market with imperfect information. There are 10 bad quality cars (lemons) and 12 good quality cars. What is the equilibrium price?
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