The "Lemons Problem" Is Overcome in the Used Car Market

question 67

Multiple Choice

The "lemons problem" is overcome in the used car market by

• A)strict government regulation of private deals between individual buyers and sellers of used cars.
• B)most used cars selling for well below their true values.
• C)"lemon insurance" policies being offered by insurance companies.
• D)the existence of used car dealers who are concerned about maintaining their reputations.

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Definitions:

Customer Needs

The recognized desires or requirements of consumers that drive their purchasing behaviors and decisions.

Modular Design

A design approach that divides a system into smaller parts called modules, which can be independently created, modified, replaced, or exchanged with other modules.