55. Akerlof points out that commercial dishonesty flourishes when quality is difficult

to identify before purchase. Which of these statements is untrue?

a. Dishonest dealings tend to drive honest dealings out of the market when

quality is difficult to evaluate.

b. The cost of dishonest dealing is less than the direct losses to purchasers of

poor goods because it must also include the losses from driving legitimate

businesses out of existence.

c. Underdeveloped countries must often devote substantial resources to

export quality control in order to maintain acceptable perceived quality

levels

d. The costs of recognizing quality are higher the greater the variation of the

quality distribution

e. None, all statements are true