Asked by Kirsten Landsverk on Apr 27, 2024
Verified
The process by which sellers send signals to buyers conveying information about product quality is known as:
A) asymmetric information.
B) market signaling.
C) a lemons problem.
D) moral hazard.
Market Signaling
Process by which sellers send signals to buyers conveying information about product quality.
Asymmetric Information
A situation in which one party in a transaction has more or better information than the other, often leading to an imbalance in power and potentially unfair outcomes.
Product Quality
The measure of the perceived value, effectiveness, and reliability of a product as judged by the consumer.
- Comprehend and assess the processes of market signaling outside the realm of education.
Verified Answer
JL
Juliana LovatoMay 02, 2024
Final Answer :
B
Explanation :
Market signaling is the process by which sellers send signals to buyers conveying information about product quality, which is intended to reduce information asymmetry and increase trust between buyers and sellers. The other options (asymmetric information, a lemons problem, and moral hazard) are related concepts, but they do not accurately describe the specific process of market signaling.
Learning Objectives
- Comprehend and assess the processes of market signaling outside the realm of education.