A reservation price is the lowest price a seller will accept. Also assume that buyers are…

A reservation price is the lowest price a seller will accept. Also assume that buyers are risk-neutral and therefore are interested only in the average quality of the cars sold in the used car market. The lemons model assumes an equal number of lemons and cherries in the initial analysis in order to simplify calculations. Consider more generally what happens based on different percentages of lemons in the market.