If in the market for used bikes only sellers can distinguish between good quality and bad quality used bikes, then in that market there exists
A) perfect information.
B) asymmetric information.
C) public information.
D) duopoly information.

Question

Quizplus · Accepted Answer

Asymmetric information exists in the market for used bikes because only the sellers can distinguish between good quality and bad quality bikes, while buyers cannot easily discern the quality. This information asymmetry can lead to adverse selection and the potential for sellers to take advantage of unknowing buyers.

If in the Market for Used Bikes Only Sellers Can