16.5 Suppose 100 cars will be offered on the used-car market. Let 50 of them be good...

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16.5 Suppose 100 cars will be offered on the used-car market.

Let 50 of them be good cars, each worth €10 000 to a buyer, and let 50 be lemons, each worth only €2000.

Compute a buyer’s maximum willingness to pay for a car if he or she cannot observe the car’s quality.

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