What do economists call the problem

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Consider a market for used cars. Suppose there are only two kind of cars: lemons and good cars. A lemon is worth $1,500 both to its current owner and to anyone who buys it. A good car is worth $6,000 to its current and potential owners. Buyers can't tell whether a car is a lemon until after they have bought the car.

What do economists call the problem that buyers of used cars face? What is the price of a used car? Explain and substantiate your answer.

Reference no: EM131124156

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What do economists call the problem : What do economists call the problem that buyers of used cars face? What is the price of a used car? Explain and substantiate your answer.
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