Buyers: Good fridges = $600 and poor fridges = $300. Sellers: good >= $400, poor fridges >= $200. Both are risk neutral. a) If the proportion of good and bad are 50-50, then all fridges are sold at $450.

b) If only 10% of available fridges are good, then there is an adverse selection problem..

c) Both a and b.

d) None.