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please refer to the image below 27 Information Economics (10 p) Consider a world with only two types of cars, good cars and lemons (bad

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27 Information Economics (10 p) Consider a world with only two types of cars, good cars and lemons (bad cars). If you are the owner of a car you will with certainty know what group your car belongs to. 15% of all produced cars are lemons. If your car is a good one it would be worth $2000 to you, while a lemon would be worth only $1500. If a consumer is risk neutral, what is his reservation price for your used car? (2 p) If you have a good car, what is the lowest price that you would sell your car for? (2 p) What kind of cars will be sold in the market for used cars? (2 p) Select one alternative O No used cars will be sold O Only lemons O Only good cars O Both good cars and lemons

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