There is asymmetric information in the used car market because sellers cannot distinguish between lemons (low-quality) and plums (high-quality) but buyers can.

Question

Quizplus · Accepted Answer

In the used car market, sellers typically have more information about the condition of the car (whether it's a lemon or a plum) than buyers, creating a situation of asymmetric information where buyers cannot accurately assess the quality of the car compared to sellers.

There Is Asymmetric Information in the Used Car Market Because