The correct answer is the first option, "Staff may lose sight of a person's individuality once a diagnostic label is assigned." In the study, the participants faked symptoms of schizophrenia at first, leading the psychiatrists to diagnose them. This doesn't show that the psychiatrists misdiagnose because they were seeing the correct symptoms. The Rosenhan study may have had ethical issues, but thats not its major importance. This study doesn't shel that patients are better at diagnosing mental disorder because that was not tested at all. Instead, the first option is the correct answer because even thought the fake patients acted normal again after being diagnosed, the staff of the mental hospitals treated them as if they were schizophrenic.