The lemons problem is thatA) cars of verifiable high quality are withheld from the used car marketB) cars of verifiable low quality are withheld from the used car marketC) cars of unverifiable high quality are withheld from the used car marketD) cars of unverifiable low quality are withheld from the used car market

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​The lemons problem is thatA) ​cars of verifiable high quality are withheld from the used car marketB) cars of verifiable low quality are withheld from the used car marketC) cars of unverifiable high quality are withheld from the used car marketD) ​cars of unverifiable low quality are withheld from the used car market

Shomi Ghosh · Accepted Answer

Final Answer : C, Explanation :  The lemons problem refers to the information asymmetry that arises when buyers of used cars cannot determine the true quality of the vehicle they are purchasing. As a result, sellers of cars of unverifiable high quality may choose to withhold them from the market, leading to a market dominated by lower quality vehicles (or lemons). This is also known as adverse selection.

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