QuestionDecember 15, 2025

There is asymmetric information in the used-car market because square square cannot distinguish between lemons and plums buyers

There is asymmetric information in the used-car market because square square cannot distinguish between lemons and plums buyers
There is asymmetric information in the used-car market because
square 
square  cannot distinguish between lemons and plums
buyers

Solution
4.6(328 votes)

Answer

buyers Explanation 1. Identify who has less information In the used-car market, "lemons" are bad cars and "plums" are good cars. Buyers cannot fully assess car quality before purchase. 2. Match the correct term Since sellers know more about car quality than buyers, the asymmetry comes from buyers not being able to distinguish between lemons and plums.

Explanation

1. Identify who has less information <br /> In the used-car market, "lemons" are bad cars and "plums" are good cars. Buyers cannot fully assess car quality before purchase. <br />2. Match the correct term <br /> Since sellers know more about car quality than buyers, the asymmetry comes from buyers not being able to distinguish between lemons and plums.
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