Multiple Choice
In the used car market with no warranties,the equilibrium is a ________ and there is ________.
A) pooling equilibrium; inefficiency, partly because of oversupply of good cars
B) pooling equilibrium; inefficiency, partly because of oversupply of lemons
C) separating equilibrium; no inefficiency
D) separating equilibrium; inefficiency, partly because of oversupply of lemons
E) pooling equilibrium; no inefficiency
Correct Answer:
Verified
Correct Answer:
Verified
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