In the market for used cars, which of the following is a reason behind the crowding out of desirable cars by lemons or inferior ones?
A) Experience-curve effects
B) Time compression diseconomies
C) Principal-agent problem
D) Information asymmetry

Question

Quizplus · Accepted Answer

In the market for used cars, unequal information between sellers and buyers has led to a lemons problem. Information asymmetries can result in the crowding out of desirable goods and services by inferior ones.

In the Market for Used Cars, Which of the Following