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

question 59

Multiple Choice

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 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

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