Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. If buyers have pessimistic expectations about the used bikes in the market, how many used plums (high-quality used bikes) will be sold?

How does an unusually warm winter affect the equilibrium price and quantity of gloves?

A) It raises both the price and the quantity. B) It raises the price and decreases the quantity. C) It lowers the price and increases the quantity. D) It lowers both the price and the quantity.

Firms use various methods for identifying customers such as ________ and ________

A) observable characteristics such as willingness to wait in long lines; their actions such as whether or not they live a long time B) observable characteristics such as age; their actions such as willingness to wait in long lines C) the color of their hair; whether or not they roll their eyes at high prices D) None of the above.