If fewer cigarettes are consumed with symmetric information than asymmetric information, it follows that
A)with asymmetric information the demand for cigarettes is lower than with symmetric information.
B)with symmetric information the demand for cigarettes is lower than with asymmetric information.
C)the demand for cigarettes is the same with or without asymmetric information.
D)there are more free riders with asymmetric information than symmetric information.
E)There is not enough information to answer the question.

Question

Quizplus · Accepted Answer

With symmetric information, all parties have the same information about the risks and consequences of smoking, leading to a lower demand for cigarettes compared to a situation with asymmetric information, where one party may not be fully aware of the risks.

If Fewer Cigarettes Are Consumed with Symmetric Information Than Asymmetric