If one side of the market,either the buyer or seller of a good or service,has better information than the other side,there is
A) moral hazard.
B) asymmetric information.
C) an external cost.
D) a free-rider problem.

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one side of the market has better information than the other. This can lead to a market failure, as the party with less information may make decisions that are not in their best interest. Moral hazard refers to the tendency for people to take risks when they are insured against losses. External cost refers to the cost that affects people who are not directly involved in a transaction. Free-rider problem occurs when people benefit from a good or service without paying for it.

If One Side of the Market,either the Buyer or Seller