Benjamin sells used cell phones, and buyers find it difficult to assess the quality of this product before buying. Which of the following statements is NOT consistent with the situation in Benjamin's market?
A)Benjamin may end up selling low-quality used cell phones.
B)Customers will pay only a low price, even if the phone quality is high.
C)Adverse selection of buyers will be present.
D)The market will skew toward low quality.

Question

Quizplus · Accepted Answer

Adverse selection typically refers to a situation where sellers have more information about the product quality than buyers, leading to high-quality goods being driven out of the market. It does not refer to the selection of buyers but rather to the quality of goods being sold.

Benjamin Sells Used Cell Phones, and Buyers Find It Difficult