Due to adverse selection, very few lemons will be sold in the market for used cars.

Question

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Adverse selection refers to the situation where the seller has more information about the quality of the product than the buyer. In the market for used cars, this means that sellers of low-quality cars (lemons) are more likely to try and sell their cars than sellers of high-quality cars. As a result, there may be more lemons in the market than high-quality cars.

Due to Adverse Selection, Very Few Lemons Will Be Sold