You are in the market for a used car and decide to visit a used car dealership. You know that the Blue Book value of the car you are looking at is between $20,000 and $24,000. If you believe the dealer knows as much about the car as you do, how much are you willing to pay? Why? Assume that you care only about the expected value of the car you will buy and that the car values are symmetrically distributed.

In the given question, the car values are symmetrically distributed which means that we have to compute the mean between the values that are mentioned in the question.

So, the mean is an average of the numbers, the computation is shown below:

= (Value 1 + value 2) ÷ (number of observations)

= ($20,000 + $24,000) ÷ 2

= $22,000

priyankapandeyVT priyankapandeyVT · Answer 2 · 2022-03-23T07:39:12+01:00

Value of the car is $22,000.

What is information and different types of information flow in market?

Information in a market refers to the knowledge about the purchase and sell of goods and services.

Asymmetrical Information: seller have more knowledge about the goods and services than the buyers.in this kind of situation, the market collapses.
Symmetrical Information: the seller and buyer both have equal amount of information about the goods and services.

Given:

The value of the used car is between $20,000 and $24,000.
The buyer and seller have equal amount of information.

As both the parties have equal amount of knowledge, i.e. Symmetrical distribution of information. We'll compute the price by mean.

(one value of car + second value of car)/no of observation

=($20,000+$24,000)/2

=$22,000

Therefore, the value of the car should be $22,000.

Learn more about information distribution here:

https://brainly.com/question/6803232