When sellers have better information about product quality than do buyers, lower-quality products tend to become more common in the market.

Question

Quizplus · Accepted Answer

This is known as the "lemons problem" in economics, where because buyers can't distinguish between high-quality and low-quality products, sellers have an incentive to offer lower-quality products at a higher price, leading to an overall decrease in product quality in the market.

When Sellers Have Better Information About Product Quality Than Do