Many people buy used smartphones from eBay, Craigslist, and so on. Some of these phones are good quality, but many others are not, and customers often have a difficult time distinguishing between the two types. Good smartphones are valued at $400 and poor ones at $100. The supply of good smartphones is given by Q_H = 2P_H - 300; that of poor smartphones is given by Q_L = 4P_L - 100. If consumers believe that 40% of used smartphones are good quality, then the expected price of a used smartphone is _____. At that price, _____ good smartphones and _____ poor ones will be sold, making the actual likelihood of buying a good phone equal to _____.

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The Answer of Many people buy used smartphones from eBay, Craigslist, and so on. Some of these phones are good quality, but many others are not, and customers often have a difficult time distinguishing between the two types. Good smartphones are valued at $400 and poor ones at $100. The supply of good smartphones is given by Q_H = 2P_H - 300; that of poor smartphones is given by Q_L = 4P_L - 100. If consumers believe that 40% of used smartphones are good quality, then the expected price of a used smartphone is _____. At that price, _____ good smartphones and _____ poor ones will be sold, making the actual likelihood of buying a good phone equal to _____.

Many People Buy Used Smartphones from EBay, Craigslist, and So