Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 17 - Asymmetric Information, Voting, and Public Choice - Problems - Page 372: 1d

Answer

The car is more likely to be good.

Work Step by Step

The buyer wishes to purchase the car at the lowest possible price. If the car was good, then the buyer would negotiate down to the average price, while if the car was bad, the buyer would have negotiated up, which is extremely unlikely and contradicts the first statement.
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