Your professor was recently in the market for a NEW road bike. He recently heard
ID: 1243232 • Letter: Y
Question
Your professor was recently in the market for a NEW road bike. He recently heard about a new company "Vilano" that supposedly makes good road bikes. However, since this is a now company he does not have much experience about the overall quality of the bikes made by this company. In order to find out more information, he looks up Craigslist to see if road bikes made by this company are being sold in the used market around the country. In particular, he collects dat a on the prices of used bikes made by this company. Why does collecting data on USED bikes made by this company, offer insight into the quality of NEW bikes made by this company? Clearly explain using the concepts learned in class.Explanation / Answer
In this scenario, collecting data of used bikes will help the professor determine its quality. For example most of the tangible products such as machinery, computer, cars, bikes and various other do have a second sale market if the product is hot cake in the market, and is highly durable and sustainable. If a good is low in price, it is reasonable to say that such an good has is high in demand if its quantity is not deteriorated in compare to competitors in the market. And due to this fact the high demand will result in a second hand market, thus helping the consumers or interested people know that the good is also good in quality if compared with other competitor's product or substitutes.
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