Over the past century, the growth rate of real GDP in the United States has averaged approximately

Why is the study of asymmetric information associated with the market for "lemons"?

A) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." B) Because there is little advertising in the market for lemons, buyers have difficulty determining the quality of lemons before they are purchased. C) Sellers of citrus fruit — lemons, oranges, grapefruit — know the difference between bad fruit and good fruit; buyers do not have this information. D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons."

In the above figure, what would be the profit-maximizing output and price for this natural monopolist?

A) 1,200; $3 B) 900; $7 C) 700; $7 D) 700; $10