Suppose That Two Types of Indistinguishable Coffee Beans Are Imported

question 107

Multiple Choice

Suppose that two types of indistinguishable coffee beans are imported to the U.S.: those grown in the mountains of South America and those grown in greenhouses in Canada.Mountain grown coffee produces a better tasting coffee,but buyers cannot distinguish the beans by sight or smell.Only the importers know the source of the beans.Buyers value mountain grown beans at $10 a pound and greenhouse grown beans at $3 a pound.Assume that 70% of imported beans are mountain grown,and 30% are greenhouse grown.
As time goes on,the buyers' reservation price will __________ and __________ mountain grown beans will be offered for sale.

• A)rise;more
• B)fall;more
• C)rise;fewer
• D)fall;fewer

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