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2 Nov 2020

7. When adverse selection exists in the used car market, which of the following will prevail?

a. Buyers will generally offer a very high price, closer to the price of a good car.

b. Buyers will generally offer a very low price, closer to the price of a lemon.

c. Buyers will generally offer a price somewhere between the price they would be willing to pay for a good car and the price they would be willing to pay for a lemon.

d. All buyers will end up buying a car. 

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Raushan Raj
Raushan RajLv8
2 Nov 2020

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