That Most Used Cars Are Sold by Intermediaries (I

question 55

Multiple Choice

That most used cars are sold by intermediaries (i.e.,used car dealers) provides evidence that these intermediaries

• A) have been afforded special government treatment, since used car dealers do not provide information that is valued by consumers of used cars.
• B) are able to prevent potential competitors from free-riding off the information that they provide.
• C) have failed to solve adverse selection problems in this market because "lemons" continue to be traded.
• D) do all of the above.

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Definitions:

Basic Assumption

A fundamental principle or belief that is accepted as true without proof.

Voidable

Refers to a legal distinction indicating that an agreement or transaction can be nullified or canceled by one of the parties involved.

Rescinded

Describes an action whereby a contract, order, or agreement is revoked, canceled, or repealed.

Antedated

Refers to a document or event dated earlier than the actual date, often done to give the appearance of an earlier occurrence.