Adverse selection problem in the kiwifruit market leads to the presence of low-quality kiwifruit that will increase the number of high-quality kiwifruit.

Question

Quizplus · Accepted Answer

Adverse selection problem in the kiwifruit market would lead to the presence of low-quality kiwifruit, but it would not increase the number of high-quality kiwifruit. Instead, it could decrease the overall quality of kiwifruit in the market as buyers may be unable to distinguish between high and low quality, potentially reducing the incentive for producers to supply high-quality kiwifruit.

Adverse Selection Problem in the Kiwifruit Market Leads to the Presence