The buyer runs a risk of being sold a low quality good when which type of problem is present
A)principal-agent problem
B)moral-hazard problem
C)problem involving hidden actions
D)problem involving hidden characteristics

Question

Quizplus · Accepted Answer

The problem involving hidden characteristics occurs when the buyer cannot observe the quality of the product before purchasing it. This creates an information asymmetry between the buyer and the seller, which can result in the buyer being sold a low-quality good.

The Buyer Runs a Risk of Being Sold a Low