Adverse selection is a situation in which asymmetric information results in low-quality goods or low-quality consumers being squeezed out of transactions because they are unable to demonstrate their quality.

Question

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Adverse selection is a situation where asymmetric information results in high-quality goods or high-quality consumers being squeezed out of transactions because they cannot distinguish themselves from low-quality goods or consumers.

Adverse Selection Is a Situation in Which Asymmetric Information Results