Question
At the end of year, he found his farm operation less profitable than expected.Hence, he put his farm up for sale and began to advertise
At the end of year, he found his farm operation less profitable than expected.Hence, he put his farm up for sale and began to advertise the sale of his orchard online. A lot of potential buyers visited his orchards, and asked him a lot of questions regarding its quality, such as quality of soil, profitability, the type of fertilizer he uses, etc. Since those characteristics are not known to buyers, he tends not to reveal the full and correct information about his property, and potential buyers would end up buying that property at a higher price than the market price.
Question: From this paragraph, discuss how one of the following two economic concepts (adverse selection vs moral hazard) is relevant (refer to chapter 8)
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