Scenario: The market for used cell phones is very popular in Barylia. However, several phones available in this market are of in
ferior quality and it is often impossible to differentiate between a good-quality phone and a poor-quality phone. Refer to the scenario above. Based on the given information, we can conclude that the market for used cell phones in Barylia: is perfectly competitive. has only one seller. is monopolistically competitive. has asymmetric information.
Several phones available in Barylia market are of inferior quality and it is often impossible to differentiate between a good-quality phone and a poor-quality phone.
So, we can conclude that the market for used cell phones in Barylia: has asymmetric information.
Asymmetric information or often called information failure shows the decision in transactions where one market or party has got better information than the others.
