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Suppose in a situation where there is asymmetric information the market reaches a separating equilibrium, whereby the buyers are able to distinguish between low quality
Suppose in a situation where there is asymmetric information the market reaches a separating equilibrium, whereby the buyers are able to distinguish between low quality sellers and high quality sellers. Economic theory predicts this market will: a. end up becoming a monopoly b. be inefficient with deadweight loss c. be efficient with no deadweight loss d. fall apart and seize to exist due to a free rider
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