Imperfect information on the part of buyers and sellers
A) will not stop the economy from achieving market efficiency, assuming the other conditions for market efficiency hold.
B) is no longer a problem because the "truth-in-advertising" regulations have been instituted.
C) remains a barrier to achieving market efficiency, at least in some industries.
D) cannot persist in a market economy.

Question

Quizplus · Accepted Answer

Imperfect information can prevent markets from achieving efficiency because if buyers and sellers do not have full or accurate information, they cannot make optimal decisions. This can lead to market failures, where resources are not allocated in the most efficient manner. Despite regulations like "truth-in-advertising," imperfect information can still exist due to complexities in products, services, and market conditions.

Imperfect Information on the Part of Buyers and Sellers