In Order for a Firm to Produce High Quality Goods

Multiple Choice

In order for a firm to produce high quality goods in an asymmetric information market with high and low quality producers:

A) the present value of revenue must be positive.
B) the present value of profits has to be higher than the costs of operating.
C) the present value of the premium for high quality goods must be higher than the gain from cheating.
D) the present value of cheating must be higher than the gain from producing high quality goods.