Q5: Consider that you are in need of transportation so you walk to the local...
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Q5: Consider that you are in need of transportation so you walk to the local car dealership to buy a used Ford Bronco. The salesman at the dealership presesnt you with 3 options. All of the Ford Broncos are white and were manufactured in 1994. On the outside, they all appear to be in the same condition. However, you are unaware of the exact histories of the cars (there is asymmetric information). The dealer knows that the first Bronco was in good condition, and has not been in any wrecks, so it is worth $18,500. The second Bronco was in several accidents, and because water leaks into it when it rains it is only worth $6,750. The last Bronco is in so-so condition, but was owned by O.J. Simpson which is why it is worth $25,000. Suppose you are not a savy buyer (so the market does not fail), and you purchase a Ford Bronco from this dealership. How much money did the dealer make selling you a Ford Bronco? (Round to 2 decimals)
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