Markets are more likely to be subject to adverse selection problems when:
A)information is easily available to consumers and sellers.
B)there is an imbalance of information between buyers and sellers.
C)the goods sold in the market are highly uniform in quality.
D)the market relies on independent certifiers of quality.

Question

Quizplus · Accepted Answer

Adverse selection problems arise in markets where there is an imbalance of information between buyers and sellers, leading one party to potentially exploit their informational advantage, often resulting in market inefficiencies or failures.

Markets Are More Likely to Be Subject to Adverse Selection