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What must a seller in a PID disclose to a potential buyer?

1 Answer

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Final answer:

Sellers can reassure potential buyers by disclosing information transparently, providing warranties, allowing inspections, and offering certifications to demonstrate the product's quality.

Step-by-step explanation:

To disclose information to a potential buyer in a transaction suffering from imperfect information, a seller can employ several strategies. These include being transparent about the condition and history of the product, offering warranties or guarantees, allowing for product trials or inspections, and providing third-party certifications or assessments. For example, in the case of selling a used car, detailing the full maintenance history, acknowledging any known issues, and offering the buyer a test drive could help reassure them about the quality and condition of the car. The more problems the sellers disclose, typically, the lower the selling price will be. However, transparency can build trust and potentially lead to a sale more effectively than withholding information.

User Frank Zhang
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