The buyer runs a risk of being sold a good of low quality when there is
Hidden characteristics create the risk of buying a low-quality good. When sellers know quality better than buyers before exchange, buyers cannot readily distinguish good…
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The buyer runs a risk of being sold a good of low quality when there is
Answer and explanation
Correct answer C
Hidden characteristics create the risk of buying a low-quality good. When sellers know quality better than buyers before exchange, buyers cannot readily distinguish good products from bad ones. Hidden actions instead concern behaviour that is difficult to observe.
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Gujarat SET (GSET)