Selling a Used Car

We call this the adverse selection of sellers. When people selling something have more information about its quality than people buying it, it's likely it will end up with a lot of lower quality goods on the market. And you'll see this in all sorts of ways with some products. The government actually forces businesses to provide truth information about the quality of what they're selling. For instance, medicines need to hve a label that says they're cleared by the food and drug administration. You also see that ou fruits sometimes have stickers that say they are organic. Again, not everyone can stick these on their fruit.