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> [...] Then they are only willing to pay a fixed price for a car that averages the value of a "peach" and "lemon" together (p_avg). So every used car has the
by nsuser3 8y ago
> [...] Then they are only willing to pay a fixed price for a car that averages the value of a "peach" and "lemon" together (p_avg).
So every used car has the same price?
- falsedan 8y agoThat’s what the Kelly Blue Book thinks
- blowski 8y agoNo, because there are other factors than whether they are a ‘lemon’ or a ‘peach’. For example, age, mileage, brand value, warranty offered, convenience of purchase, etc. These don’t tell you whether the car is a lemon or a peach, although some can help you to guess it. If you held all these other factors constant, then yes, all used cars would have the same price.