Both Screening and Signaling

question 34

Multiple Choice

Both screening and signaling:

• A) are ways to decrease information asymmetry between two parties.
• B) correct inefficiency in the market.
• C) can increase surplus gained in a market.
• D) All of these statements are true.

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Definitions:

Extend Credit

The act of allowing a customer to purchase goods or services now and pay for them later, under agreed terms and conditions.

Resale

The act of selling again, especially selling a purchased item to another buyer.

Adjustment Messages

Communications intended to address and rectify a mistake or misunderstanding.

Revise

To review, alter, and amend content or documents with the intention of making corrections or improvements.