It has been seen that the good cars may be driven out of the market by the lemons. But in a more continuous case with different grades of goods, even worse pathologies can exist. For it is quite possible to have the bad driving out the not-so-bad driving out the medium driving out the not-so-good driving out the good in such a sequence of events that no market exists at all.
The Market for “Lemons”: Quality Uncertainty and the Market Mechanism
by George A. Akerlof
The Quarterly Journal of Economics, Volume 84, Issue 3, 1 August 1970, Pages 488–500
https://www.iei.liu.se/nek/730g83/artiklar/1.328833/AkerlofMarketforLemons.pdf