Question
5. Suppose there is a buyer and seller in a used car market with utility functions US = X UB=3* E(X) where X is the quality of the car. Suppose the market price of a used car is P = 50. Explain why the buyer's utility function is UB = 3* E(X), and not UB = 3X. In a similar fashion, explain why is the seller's utility f
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