Even when both dont know the quality symmetric

Info icon This preview shows pages 9–18. Sign up to view the full content.

Even when both don’t know the quality ( symmetric information ), all the cars will be sold for $1,500 and this outcome is efficient as buyers value them more than sellers. In this case, high quality goods increases the average value of low quality goods, causing positive externality .
Image of page 9

Info icon This preview has intentionally blurred sections. Sign up to view the full version.