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Consider the market for compact stereos, which are units that typically include a radio, compact disc player, and a set of relatively small speakers. Both

Consider the market for compact stereos, which are units that typically include a radio, compact disc player, and a set of relatively small speakers. Both high and low quality stereo systems are sold on the market.

A. Assuming that sellers have more information regarding quality than buyers (although buyers do have some information), would the fraction of high quality systems on the market be higher, lower or the same as in the case of full information for buyer and seller?

B. What practices have arisen in the market to help alleviate the asymmetric information problem that consumers face?

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