In markets with incomplete information,middlemen tend to __________ total economic surplus by __________.

Question

Quizplus · Accepted Answer

Middlemen can increase total economic surplus by matching buyers and sellers with higher reservation prices, leading to more efficient trades. This is particularly important in markets with incomplete information, where it may be difficult for buyers and sellers to find each other without a middleman. The other options, reducing total economic surplus through raising prices or giving misleading information, do not benefit either party in the long run and can lead to market inefficiencies.

In Markets with Incomplete Information,middlemen Tend to __________ Total Economic