If the seller knows more about the good than the buyer knows there exists
A) an externality.
B) asymmetric information.
C) moral hazard.
D) a public goods problem.

Question

Quizplus · Accepted Answer

Asymmetric information exists when one party (in this case, the seller) has more knowledge or information about the good being sold than the other party (the buyer). This can potentially result in the seller taking advantage of the buyer, and is a form of market failure.

If the Seller Knows More About the Good Than the Buyer