A term applied to a situation wherein the parties involved in a transaction have non-identical information that may affect the outcome of that transaction is:
A) search costs
B) adverse selection
C) asymmetric information
D) marginal costs
E) transaction information

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party in a transaction has more or better information than the other party, which can lead to adverse selection and ultimately affect the outcome of the transaction. Search costs refer to the costs associated with finding information about a transaction or product. Marginal costs refer to the additional cost of producing one more unit of a product. Transaction information is not a commonly used term in economics.

A Term Applied to a Situation Wherein the Parties Involved