If only a small percentage of used computers on the market are plums (high-quality), then the asymmetric information concerning the quality of used computers has generated a ________ market.
A) thin
B) weak
C) tight
D) competitive

Question

Quizplus · Accepted Answer

A thin market refers to a market with a limited number of buyers and sellers, which can be the case when only a small percentage of used computers are of high quality. This limited supply of high-quality computers could deter potential buyers, leading to a thin market. A weak market typically refers to a market with low demand or high competition, which may not necessarily be the case in this scenario. A tight market refers to a market with limited supply, but this description applies more to the supply side than the demand side, so it is not the best choice. A competitive market exists when there are many buyers and sellers operating in the market, which may not be the case given the asymmetric information surrounding the quality of used computers.

If Only a Small Percentage of Used Computers on the Market