Suppose That in New Crankshaft, Pennsylvania, the Quality Distribution of the 3,000

question 18

Multiple Choice

Suppose that in New Crankshaft, Pennsylvania, the quality distribution of the 3,000 used cars on the market is such that the number of used cars of value less than V is V/2.Original owners must sell their used cars.Original owners know what their cars are worth, but buyers can't determine a car's value until they buy it.An owner can either take his car to an appraiser and pay the appraiser $100 to appraise the car (accurately and credibly) or sell the car unappraised.In equilibrium, car owners will have their cars appraised if and only if their value is at least

• A)$200.
• B)$300.
• C)$1,500.
• D)$100.
• E)$400.

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Definitions:

Income Sharing

A financial arrangement where profits or revenues are distributed among participants or partners, often seen in partnerships and joint ventures.

Partnership Assets

Resources owned jointly by partners in a partnership arrangement, used in the operation of the partnership business.

Cash Distribution

The payment of earnings or capital to shareholders, stakeholders, or partners by a corporation or fund.

Noncash Assets

Assets that cannot be quickly converted into cash, such as real estate, equipment, and inventory.