The market for used cars is shown in the above figure. Ten percent (10%) of all cars are lemons. A mechanic is offering to inspect a car for sale and certify that a car is not a lemon

If car sellers are risk neutral, what is the highest price that a car seller would pay for such a service? Who would buy this service?

Lemon owners would not buy this service because they know that their cars would not pass the inspection. Sellers of good cars would receive $1,900 for their cars if this service did not exist, and $2,000 for their cars with this service. Thus, each owner of a good car would pay no more than $100 for this service. All good car sellers would buy this service since not being certified signals that a car is a lemon.