Consumers of computers value high-quality ones at 1000 and


Consumers of computers value high-quality ones at $1,000 and low-quality ones at $100. The supply of high-quality computers is QH = PH ? 200. The supply of low-quality computers is QL = 2PL ? 100. Only sellers know the true quality of the computers before the sale is made. If consumers think that there is a one-third chance that a computer will be of high quality, what proportion of computers will actually be high quality?

one in two

one in three

none

 

one in four

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Business Economics: Consumers of computers value high-quality ones at 1000 and
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