A consumer is likely to avoid adverse selection and get a high-quality lunch at
A) a snack bar at a traveling carnival.
B) a vendor who parks her cart at a different location every noon.
C) a restaurant in the center of a business district.
D) a restaurant located next door to Disneyland.

Question

Quizplus · Accepted Answer

A restaurant in the center of a business district is more likely to attract a regular and loyal customer base, and thus, the quality of food is likely to be higher to maintain customer satisfaction. Additionally, such a location implies a certain level of regulatory scrutiny that ensures food safety standards are met. A snack bar at a traveling carnival, a vendor who parks her cart at a different location every noon, or a restaurant located next door to Disneyland have less incentive to maintain food quality since they rely more on impulse purchases rather than repeat customers.

A Consumer Is Likely to Avoid Adverse Selection and Get