Author Question: Why do the owners of good-quality used cars stay away from the market for used cars? What will be ... (Read 154 times)

Frost2351

  • Hero Member
  • *****
  • Posts: 557
Why do the owners of good-quality used cars stay away from the market for used cars?
 
  What will be an ideal response?

Question 2

If a monopoly engages in rent seeking,
 
  i. its average total cost curve is lower than otherwise.
  ii. it might or might not make an economic profit depending on how many other competitors also are rent seeking.
  iii. it necessarily incurs an economic loss.
  A) i only
  B) ii only
  C) iii only
  D) i and ii
  E) i and iii



kmb352

  • Sr. Member
  • ****
  • Posts: 319
Answer to Question 1

Only the owners of used cars know about the true quality of their cars, but buyers do not. Therefore, buyers are often not willing to pay a high price for used cars, thinking that the car they buy might be a lemon. As a result, it becomes unprofitable for owners of good-quality cars to sell their cars.

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

Computer programs are available that crosscheck a new drug's possible trade name with all other trade names currently available. These programs detect dangerous similarities between names and alert the manufacturer of the drug.

Did you know?

GI conditions that will keep you out of the U.S. armed services include ulcers, varices, fistulas, esophagitis, gastritis, congenital abnormalities, inflammatory bowel disease, enteritis, colitis, proctitis, duodenal diverticula, malabsorption syndromes, hepatitis, cirrhosis, cysts, abscesses, pancreatitis, polyps, certain hemorrhoids, splenomegaly, hernias, recent abdominal surgery, GI bypass or stomach stapling, and artificial GI openings.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

For a complete list of videos, visit our video library