Assume That Both High and Low Quality Appliances Are Sold

Multiple Choice

Assume that both high and low quality appliances are sold in the used appliance market. If we assume asymmetric information with sellers having more information regarding quality than buyers, which of the following is necessarily true?

A) The fraction of high quality appliances will be greater than under perfect knowledge.
B) The fractions of high and low quality appliances will be the same as with perfect information.
C) The fraction of high quality appliances will be less than with perfect information.
D) none of the above