What Would Be Expected in a Market for Used Cars

question 14

Multiple Choice

What would be expected in a market for used cars, assuming asymmetric information and buyers who have little way to determine good used cars from poor used cars?

• A)The average price for used cars would go down and drive the clunker used cars out of the market.
• B)The average price for used cars would go down and drive the better used cars out of the market.
• C)There would be little to no impact on the market for used cars.
• D)The asymmetric information would lead to a fair and efficient market.

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