In the Used Car Market,adverse Selection Creates the Lemon Problem

Multiple Choice

In the used car market,adverse selection creates the lemon problem when

A) sellers cannot judge buyers' creditworthiness.
B) buyers believe that sellers will offer only high-priced "good" used cars for sale.
C) buyers believe that sellers will sell only lemons.
D) sellers offer warranties on all used cars.
E) None of the above answers is correct because it is moral hazard that creates the lemon problem.