Consumers value high-quality dirt bikes at $6,000 and low-quality dirt bikes at $2,500. The supply of used high-quality dirt bikes is Q_H = 0.5P_H - 2,000, while the supply of used low-quality dirt bikes is Q_L = P_L - 1,000. Potential buyers cannot distinguish the difference between the two. Buyers base their willingness to pay on the belief that half the used dirt bikes are high-quality. At the buyers' willingness to pay sellers will offer _____ high-quality bikes and _____ low-quality ones. A) 125; 3,250 B) 2,000; 2,000 C) 450; 900 D) 3,000; 1,500

Question

Quizplus · Accepted Answer

The correct answer is A because at the buyers' willingness to pay, sellers will offer 125 high-quality bikes and 3,250 low-quality ones.

Consumers Value High-Quality Dirt Bikes at $6,000 and Low-Quality Dirt