Problem
It is known that some fraction d of all new cars are defective. Defective cars cannot be identified as such except by those who own them. Each consumer is risk neutral and values a non defective car at $16,000. New cars sell for $14,000 each, and used ones for $2,000. If cars do not depreciate physically with use, what is the proportion d of defective new cars?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.