Lou and Toby both live in a little town and are trying to sell their cars. Both of their cars have a blue book value of $10,000. Lou has an American car like most of the people in town own. Toby owns the only Bulgarian car in town. If people in their town are risk averse, then who will get closest to the blue book value for his car?
A. Lou will because American cars are better than Bulgarian cars.
B. Both should get the same price for their cars because both cars have the same blue book value.
C. Toby will because there is less uncertainty about the quality of Lou's car.
D. Lou will because there is less uncertainty about the quality of Lou's car.
Answer: D
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