The three ways that government policy can solve an adverse selection problem do NOT include
A)regulating quality.
B)requiring that buyers purchase a particular product.
C)providing information to buyers.
D)giving sellers an incentive to reveal truthful information.

Question

Quizplus · Accepted Answer

Requiring that buyers purchase a particular product would not solve an adverse selection problem, as it does not address the issue of asymmetrical information between buyers and sellers. The other options, such as regulating quality, providing information to buyers, and giving sellers an incentive to reveal truthful information, can all help to mitigate adverse selection problems.

The Three Ways That Government Policy Can Solve an Adverse