Author Question: A market characterized by asymmetric information will have an equilibrium price if at that price a. ... (Read 42 times)

maegan_martin · **on:** Jul 1, 2018

A market characterized by asymmetric information will have an equilibrium price if at that price
a. quantity demanded equals quantity supplied when all participants have the same information.
b. quantity demanded equals quantity supplied given prevailing information levels.
c. quantity demanded equals quantity supplied under perfect information.
d. quantity demanded exceeds quantity supplied if suppliers are better informed (and vice versa).

Question 2

The lemons model predicts quality deterioration in the used-car market because
a. used cars require increasing maintenance.
b. suppliers and demanders have different information about cars' quality.
c. used cars are generally of a lower quality than new cars.
d. people will usually buy new cars if they are available.