Asymmetric information represents a market situation in which
A)all parties to a transaction possess less than full information.
B)one party in a transaction has more information than the other party.
C)some information possessed by the parties in a transaction may be false.
D)a zero-sum game exists.

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party in a transaction has more information than the other party. This can create an imbalance of power and potentially lead to a market failure. The other answer choices do not accurately define asymmetric information.

Asymmetric Information Represents a Market Situation in Which