When sellers have private information, _____ can result.
A)adverse selection
B)a skew toward high-quality
C)disequilibrium
D)risk-seeking

Question

Quizplus · Accepted Answer

Adverse selection can occur when sellers have private information, as they may be more likely to offer goods or services that are lower quality or have hidden defects, which can result in a situation where buyers are uncertain about what they are purchasing and eventually decrease the demand.

When Sellers Have Private Information, _____ Can Result