Suppose that there are only two types of used cars, peaches and lemons. Peaches are worth $10,000 and lemons are worth $4,000. Without effective signals such as warranties, the owners of peaches cannot sell their cars for $10,000 because the
A) owners of peaches cannot convince buyers that their cars are worth $10,000.
B) buyers cannot convince owners of peaches to sell their cars for $10,000.
C) owners of lemons cannot convince buyers that their cars are worth more than $4,000.
D) buyers cannot convince owners of lemons to sell their cars for $4,000.
A
Economics
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