Which of the following is NOT a solution to adverse selection when buyers have private information?
A)The government can increase information, offer subsidies, enforce mandates, or provide insurance.
B)Sellers can offer different contracts so that buyers separate themselves.
C)Sellers can use information that is related to buyers' likely costs.
D)Sellers can simplify by charging a single average price.

Question

Quizplus · Accepted Answer

Simplifying by charging a single average price may actually exacerbate adverse selection by discouraging low-cost buyers from participating in the market. The other options listed are all potential solutions to adverse selection.

Which of the Following Is NOT a Solution to Adverse