Suppose cars are known to have a uniformly distributed quality v from 10000 to 30000. Suppose that sellers value a car o

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Suppose cars are known to have a uniformly distributed quality v from 10000 to 30000. Suppose that sellers value a car o

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Suppose cars are known to have a uniformly distributed quality v from 10000 to 30000. Suppose that sellers value a car of quality v at utility uS(v) = v, and buyers value a car of quality v at utility uB(v) = 5/6v. Suppose only sellers know the quality of their car. Given a price p, sellers and buyers can decide whether to sell/buy a car, as in class.
(a) At what price p is the highest proportion of cars sold?
(b) At the price above, what cars are sold?
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