A firm that wants to achieve economies of scale could do so by a. producing a smaller quantity of output. b. employing a smaller number of workers. c. assigning limited tasks to its employees, so they can master those tasks. d. producing an output level higher than the efficient scale.

Many potential buyers value high-quality used cars at the full-information market price of € p1 and lemons at € p2. a limited number of potential sellers value high-quality cars at € v1 ≤ p1 and lemons at € v2 ≤ p2. everyone is risk neutral. the share of lemons among all the used cars that might be potentially sold is € θ . suppose that the buyers incur a transaction cost of $200 to purchase a car. this transaction cost is the value of their time to find a car. what is the equilibrium? is it possible that no cars are sold