In a used car market, there are three levels of car quality: - =80 ("poor") - =120 ("medium") - =200 ("good")

The share of cars in each of the three quality levels is 1/3. The quality level is known only by the seller. The reservation prices of the sellers are of the quality level each. The cars are sold to the highest bidder.

Which statement is true? Choose one answer 1. An equilibrium price is 200. 2. An equilibrium price is 90. 3. an equilibrium price is 100. 4. an equilibrium price is 120. 5. an equilibrium price is 133 1/3.

!! Answer 5 is wrong!!