Adverse selection arises when

0 votes
    products of different qualities are sold at a single price because buyers or sellers are not sufficiently informed to determine the true quality at the time of purchase.
     a firm that normally produces high quality products finds defects in products that have already been sold and so they must be recalled.
     Consumers consistently purchase low quality merchandise at low prices because of budget constraints.
     a firm that produces low quality goods continues to operate over time because of lack of information about quality in the marketplace.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

0 votes
products of different qualities are sold at a single price because buyers or sellers are not sufficiently informed to determine the true quality at the time of purchase.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)



...