(Solved):When a good commodity is driven out of the market by a bad commodity, the result is called: a. adverse selection. b. negative externality. c. moral hazard. d. the commons problem. e. positive exter… View Answer…

 

Question

When a good commodity is driven out of the market by a bad commodity, the result is called: a. adverse selection. b. negative externality. c. moral hazard. d. the commons problem. e. positive externality.

 

EXPERT ANSWER

a. adverse selection.

Adverse selection refers to a problem that happens in the marketplaces in which the vendors understands more concerning the features of a commodity compared to the buyers. In such markets, the consumers face a risk

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