Where there is asymmetric information between buyers and sellers,
A)product shortages will occur at the equilibrium price.
B)product surpluses will occur at the equilibrium price.
C)markets can produce inefficient outcomes.
D)markets will fail due to the over-allocation of resources.

Question

Quizplus · Accepted Answer

Asymmetric information between buyers and sellers can lead to markets producing inefficient outcomes because one party has more or better information than the other, affecting the quality and fairness of transactions.

Where There Is Asymmetric Information Between Buyers and Sellers