When sellers have more information about hidden characteristics of a good than buyers have, more low-quality units are likely to be sold than high-quality units.This is

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This situation is commonly known as the lemons problem, where the presence of information asymmetry results in a higher proportion of low-quality units being sold than high-quality units, as the seller knows more about the true quality of the product. This can have detrimental effects on the market and overall economic efficiency.

When Sellers Have More Information About Hidden Characteristics of a Good