Which statement best captures the passage's argument?

When sellers know much more than buyers, good products can be driven out of a market. (The passage describes the downward spiral caused by the information gap, and notes it needs no dishonesty at all.)

According to the passage, what does the owner of a genuinely good car do when offered a middling price?

takes the car off the market (The text says the middling price "insults the owner of a genuinely good car, who takes it off the market instead.")

Why does the passage suggest a warranty helps solve the problem?

Only a seller with a sound car can afford to make that promise. (The text says a warranty "lets an honest seller promise something a dishonest one cannot afford", which is a signal buyers can trust.)

In this passage, "asymmetric information" means

one side of a deal knowing far more than the other (It names the gap in the first sentence: the seller has years of experience with the car, the buyer has twenty minutes.)

The Seller Knows More: Level 4 Reading Comprehension Questions

In a used car market, the seller has driven the car for years and the buyer has looked at it for twenty minutes. That gap is called asymmetric information, and it can wreck a market without anyone telling a single lie.

Suppose half the cars offered are sound and half are hiding faults. A buyer who cannot tell them apart will not pay the full price of a sound car; he will offer something in the middle, to cover the risk of a bad one. But that middling price insults the owner of a genuinely good car, who takes it off the market instead. The share of faulty cars therefore rises, buyers lower their offers again, and more honest sellers walk away. Quality can spiral downward until only the worst cars remain.

The remedies all attack the information gap rather than the price. A warranty lets an honest seller promise something a dishonest one cannot afford. Independent inspections, service records, and a dealer's reputation do similar work: they make the hidden condition of the car visible and costly to fake.

Trust, seen this way, is not merely a private virtue. It is infrastructure, and markets that lack it shrink.

Comprehension questions