Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
33
Transcribed Image Text:Which of the following can be mitigated by market signalling?
Adverse selection
Moral hazard
O The principal-agent problem
Market screening
Expert Solution
Step 1
In the marketing signal the sellers and consumer convey the information about products. By providing information about products, the sellers and buyers can more trust on each other about products quality. In this process market works more efficiently.
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