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by TBurette
2665 days ago
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You could say it's a 'lemon market' ( https://en.wikipedia.org/wiki/The_Market_for_Lemons ). A lemon market is when the buyer doesn't have enough information to tell the difference between a good product (peach) and a bad one (lemon).
Since the buyer can't tell the difference, the price he is willing to pay will end up somewhere between the value of the peach (more expensive) and the value of the lemon (cheaper). What happens then is that the sellers of lemons thrive while the the sellers of peaches end up leaving the market. This lowers the average price and creates a cycle where the price decreases which drive even more sellers of quality products to leave the market which lowers the price further... |
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