Which of the following worsens adverse selection due to buyers having private information?
A)Buyers have the choice to buy or not buy whenever they want to.
B)Buyers have constraints on their ability to buy or not buy whenever they want to.
C)Sellers have very limited ability to change price.
D)Sellers have flexibility to lower price but not to raise price.

Question

Quizplus · Accepted Answer

When buyers have the choice to buy or not buy whenever they want, they can use their private information to make purchasing decisions that benefit them, leading to adverse selection.

Which of the Following Worsens Adverse Selection Due to Buyers