Question

There are two types of electric pencil-sharpener producers.

"High-quality" manufacturers produce very good sharpeners that
consumers value at $14. "Low quality" manufacturers produce less
good one

Answer 1

worth $6 to customers. Assume that every pencil is the same and that each one can only be sharpened once.

There are 400 customers at the market, and each of them has a pencil. Suppose that each Consumers have an equal chance of owning a pencil from a high-quality or low-quality manufacturer. Unless a customer has a pencil created by a high-quality manufacturer, in which case the worth of the pencil after it has been sharpened is 30, each consumer's pencil has no value after it has been sharpened. Up to 200 sharpeners can be produced by one manufacturer.