A) Private information.
In the used car market, the seller has more information about the status of the vehicle than the buyer so customer is more likely to end up paying higher than the value of the vehicle.
B) option B the government actors may have their own incentives that might not align with market efficiency.
Incentives like promoting the new car industry rather the old car market or etc.
The used car market is prone to failures because of lot of asymmetric information. The seller here has more information than the buyer hence it acts as a reason for market failure with buyer usually paying more than the worth.
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