Which choice most logically completes the text? | Verbal SAT Question

Economist George Akerlof demonstrated that in markets characterized by asymmetric information—where sellers know the true quality of a good but buyers cannot independently verify it prior to purchase—adverse selection can cause market unraveling. Because risk-averse buyers will only pay an average price reflecting expected market quality, owners of high-quality goods will refuse to sell at that discounted rate and will withdraw from the market. Consequently, the proportion of low-quality goods increases, driving buyer valuations down further. Akerlof concluded that without external signaling mechanisms, such as third-party certifications or binding warranties,

Which choice most logically completes the text?

market equilibrium will naturally stabilize at a price that satisfies both buyers and sellers of premium goods.

asymmetric information will exclusively harm sellers of low-quality products while benefiting premium retailers.

the market may degrade until only substandard goods are traded, or collapse entirely despite mutual gains from trade.

buyers will eventually obtain complete technical knowledge of all products through repeat purchases.