When a seller of a good knows more about the quality of a product than the buyer, this is known as:
A) asthmetric informetion
B) moral hazard
C) moral delinquency
D) aberse selection

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party in a transaction has more information than the other. In this case, the seller knows more about the quality of the product than the buyer. This can lead to adverse selection, where the buyer selects lower quality products due to the lack of information, and the seller takes advantage of this information asymmetry.

When a Seller of a Good Knows More About the Quality