When starting a new business,entrepreneurs often know more about the opportunities and problems related to the business than do potential investors. This is known as
A) Information asymmetry.
B) Uncertainty.
C) Information symmetry..
D) A and B only.
E) None of the above.

Question

Quizplus · Accepted Answer

Information asymmetry refers to a situation where one party in a transaction has more information than the other, creating an uneven distribution of information. In the context of starting a new business, entrepreneurs often have more information about the business' opportunities and problems than potential investors, which can create information asymmetry.

When Starting a New Business,entrepreneurs Often Know More About the Opportunities