A consequence of adverse selection is:
A)buyers may lose surplus they would have gained with more complete information.
B)sellers may lose surplus they would have gained with more complete information.
C)transactions do not take place that would have been possible if the parties had the same information.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

Adverse selection can lead to multiple consequences, including loss of surplus for buyers and sellers, and the absence of potential transactions that would have taken place if both parties had the same information. Therefore, all the statements are true.

A Consequence of Adverse Selection Is