Figure 14.3 represents the market for used refrigerators. Suppose buyers are willing to pay $300 for a plum (high-quality) used refrigerator and $100 for a lemon (low-quality) used refrigerator. Compared to the situation when buyers have neutral expectations, if buyers believed that fewer than 50% of used refrigerators are lemons (low-quality):
A. more plums (high-quality) used refrigerators would be on the market.
B. fewer plums (high-quality) used refrigerators would be on the market.
C. fewer lemons (low-quality) used refrigerators would be on the market.
D. the same total number of used refrigerators would be on the market, but more of them would be plums (high-quality) used refrigerators.
Answer: A
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A. -14. B. -1.33. C. -0.75. D. 2.