Market failure due to asymmetric information is illustrated in which situation?
A) A company sells a product with harmful ingredients. The ingredients are listed on the label in small print.
B) Consumers seek to buy a product because it tastes good, even though they know that it contains harmful ingredients.
C) Consumers buy a product labeled as a foot cream, but they use it as an eye cream even though there is a warning on the label to use it only on feet.
D) A company does not list all a product's ingredients on the label. Customers buy the product unaware that it contains harmful ingredients.
Correct Answer:
Verified
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