Which of the following is a possible market solution to the lemons problem?
A) Producers might offer product guarantees and warranties.
B) Producers might be required to meet certain legal standards to obtain licenses granting the right to sell their products.
C) Government agencies might be charged with directly overseeing production and distribution of certain products.
D) Liability laws might be established to ensure that firms selling certain products must face penalties in the event the products function poorly.
Answer: A
You might also like to view...
The ratio of a bank's after-tax profit to bank capital is known as
A) net interest margin. B) return on equity. C) return on capital. D) spread.
In general, the two extreme cases of market structure models are represented by:
a. monopolistic competition and oligopoly. b. oligopoly and monopoly. c. oligopoly and perfect competition. d. perfect competition and monopoly. e. perfect monopoly and oligopolistic competition.