1. Asymmetric Pricing:High Cost = QualityorQuality= High Cost 2. Problems Due to AsymmetricInformation adverse selection - opportunismcharacterized by an informed person’sbenefiting…

Slide 1 Exam Questions Slide 2 Fred and Elmer No Price War Price War Slide 3 Players’ Strategies Strategies: Elmer: Price war if Fred opens No Price war if Fred opens.…

Slide 1 Market Failures and the Role of Government Chapters 12 and 14 Slide 2 Market Failures A situation when the market fails to achieve the efficient outcome n Asymmetric…

Chapter 14 Markets with Asymmetric Information Chapter 1 Topics to be Discussed Quality Uncertainty and the Market for Lemons Market Signaling Moral Hazard The Principal-Agent…

Exam Questions Exam Questions Fred and Elmer No Price War Price War Playersâ Strategies Strategies: Elmer: Price war if Fred opens No Price war if Fred opens. Fred: Open…