A lemon market occurs when the buyer knows more about the product than the seller.
It was first written about by Akerlof in 1970, with the "lemon" referring to bad quality used cars versus "cherries" that were the good ones.
In this case buyers assume all goods are of average quality, therefore the car dealerships have can't offer good prices for high quality used cars as buyers won't buy them. Hence they sell elsewhere and it is known as the "bad driving out the good".
It is also worth noting that in terms pricing there is a slightly separate issue relating to how to price the good. In this case as there is asymmetric information a buyer sees price as an indicator of quality as they don't know the full technical details of the product. This means that low priced goods will not sell as they are seen as bad quality.
For example consider a very expensive product, such as a Ferrari or a Tiffany diamond ring priced at £50, you would think something must be wrong with it and perhaps you would no buy it. Hence lowering price can actually lower demand in this case.