The Adverse Selection Problem Suggests That

Multiple Choice

The adverse selection problem suggests that

A) the ratio of lemons (low quality) to plums (high quality) is likely to be high.
B) the ratio of plums (high quality) to lemons (low quality) is likely to be high.
C) the price of lemons (low quality) will be below buyer's willingness to pay.
D) plums (high quality) will sell for more than most buyers' willingness to pay.