You have decided to buy a new automobile and have been gathering information about the purchase price. The manufacturers website shows a list price of $44,500, which includes your preferred options: leather trim and navigation. You have also consulted the Blue Book guide to car prices and found that the average price paid for a similar new vehicle is $39,500. However, the guide also indicates that recent selling prices have ranged from $38,000 up to $42,000.

Required:

1. Which price quote, the list price or the Blue Book average price, is the more relevant for your decision? Why?

2. Which price quote is more representationally faithful? Why?