Without Warranties,used Car Buyers Can Assume That All Used Cars

question 87

Multiple Choice

Without warranties,used car buyers can assume that all used cars are "lemons" because of

• A) moral hazard.
• B) false signals.
• C) moral dilemma.
• D) adverse selection.
• E) adverse reaction.

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Definitions:

Percent Markup

The percentage added to the cost price of goods to achieve a selling price.

Fax Machine

A device that transmits scanned documents as a telephone transmission to a receiving machine producing a copy.

Selling Price

The price at which a product or service is sold to the consumer, determined by factors such as cost, demand, and market competition.

Cost

The amount of money required to purchase goods or services or the expenditure incurred to produce something.