For third- party certification to overcome the problem of_______ , consumers must believe that it is_______ .

Question

Quizplus · Accepted Answer

Third-party certification aims to overcome the problem of adverse selection, where consumers may not have enough information to distinguish between good and bad quality products or services. To trust the credential provided by third-party certification, it is important that consumers perceive it as unbiased. Therefore, option B is correct. Moral hazard is a different problem, where one party may assume undue risk because another party will bear the cost if anything goes wrong. Thus, options C and D are not relevant to the question.

For Third- Party Certification to Overcome the Problem Of_______