2 kinds of cars - one high quality and other is low quality (lemons) Buyers and sellers can distinguish between the cars (full info) and everyone is risk neutral There are 1000 lemons and 1000 good used cars Lemon sellers have a reservation price of $3000 Good used car sellers have a reservation price of $5000
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All these factors together forge a system where cars are sold at very low prices and eventually piles up the number of almost new or slightly used vehicles. >> In order to buy a car with reasonable price, you can check the used car list << Frequency Of Releasing New Models Car new models are usually being published in Japan
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At High Quality Car Sales we are a locally owned and operated family used car dealership. We pride ourselves on giving our customers the best quality vehicle at the best low prices in Adelaide. We do this by keeping our overheads low so we can pass the savings onto our customers.
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There are 100 cars of each type for sale. Sellers of high quality cars will refuse any price lower than $11000, while sellers of low quality cars have a minimum acceptable price of $5000. Suppose that the quality of a car is known to the seller, but not to the buyer. Buyer's know the probability distribution of cars in the market.