The result of effective screening and signaling can be:

A. more transactions take place.
B. more information is credibly shared.
C. surplus is increased for buyer and/or seller.
D. All of these statements are true.


Answer: D

Economics

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People who buy used homes often insist on having a "home inspection" before they finalize the purchase. If the house fails the inspection the buyer has the right to refuse to buy the house unless the seller fixes whatever problems are found. Does this help or hurt the seller?

What will be an ideal response?

Economics