What are buyers unsure about when a market has an adverse selection problem due to seller's having private information?
A)The number of sellers that are in the market.
B)The level of quality that is desired in the product.
C)The price that each seller is charging.
D)The quality level of the units that are for sale.

Question

Quizplus · Accepted Answer

In a market with adverse selection problem, buyers are unsure about the quality level of the products or units that are for sale. This is because sellers have private information about the quality level, which they may use to their advantage by selling lower quality products at a higher price. As a result, buyers are uncertain about the quality of the product they are buying, which creates the adverse selection problem. The other options (A, B, and C) are not directly related to adverse selection, although they may be factors that impact buyer's decision-making process.

What Are Buyers Unsure About When a Market Has an Adverse