Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 19

The famous comedian Groucho Marx once quipped that ''I would never join a club that would have me as a member.'' Modified to apply to market settings, the quote might be rewritten,''Iwould never buy from a seller who was willing to sell to me.'' Under what sort of market conditions would this quote apply? Connect this quote to Akerlof's lemons model. Among other things, use this quote to help identify the source of inefficiency in the lemons model.