Because of asymmetric information,a seller of a lemon used car earns
A) more profit than a seller of a plum used car.
B) less profit than a seller of a plum used car.
C) the same profit as a seller of a plum used car.
D) less revenue than a seller of a plum used car.

Question

Quizplus · Accepted Answer

Because of asymmetric information, the seller of a lemon used car has more information about the car's quality than the buyer. This allows the seller to earn more profit by selling the car for a higher price than it is worth.

Because of Asymmetric Information,a Seller of a Lemon Used Car