John's car is in need of repair so John decides to sell it to avoid the repair bill. Unaware of the problem, Suzanne buys the car. This is an example of

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This situation is an example of adverse selection, which is when one party in a transaction has more information than the other party and uses that information to their advantage. In this case, John knew about the problem with the car and didn't disclose it, while Suzanne was unaware and purchased the car. This leads to a negative outcome for Suzanne, who now has to pay for the necessary repairs.

John's Car Is in Need of Repair So John Decides