Final answer:
Penelope can sue for fraud, proceed with the purchase, demand a lower price, or cancel the contract due to the seller's failure to disclose issues with the house on the seller disclosure form.
Step-by-step explanation:
Buyer Penelope has discovered issues with the house at 212 Maple Street that weren't identified on the state-required seller disclosure form. If the seller appears to have lied on the disclosure form, Penelope has a few options. She can a) Sue the Seller for Fraud if she believes there was intentional deception. Another option is to b) Proceed with the Purchase as originally planned if she still finds the house desirable despite the newfound issues. Alternatively, she could c) Demand a Lower Price to compensate for the issues not previously disclosed. Lastly, she has the right to d) Cancel the Contract, possibly without penalty, due to the seller's failure to disclose the issues as required by law.
In the context of imperfect information affecting transaction decisions, a seller of goods can reassure a possible buyer considering a purchase by providing a comprehensive warranty, conducting an independent inspection, offering service records, or engaging in transparent communication to build trust and provide as much accurate information as possible.
The reason it is difficult for a buyer and seller to agree on a price with imperfect information is because the market price typically reflects the level of information available. If sellers are not fully transparent about the issues, the buyer may offer a lower price to offset the risk of potential undisclosed problems. Conversely, sellers may seek a higher price based on the value they perceive in the goods minus any defects they have divulged.