When buyers have private information, they
A)know more about how costly they will be to sellers than the sellers know.
B)have access to information about the sellers that sellers prefer to keep private.
C)tend to favor more specialized versions of products.
D)are at a disadvantage in making purchases.

Question

Quizplus · Accepted Answer

When buyers have private information, they have an informational advantage over the seller, as they know more about their own willingness to pay and how costly they will be to the seller. This can give them an advantage in negotiations and result in a lower price than the seller would have otherwise accepted.

When Buyers Have Private Information, They