Asymmetric information is a situation in which
A) information possessed by one party in a transaction is not known by another party.
B) information possessed by one party in a transaction is also known by another party.
C) the government has information that it chooses to pass along to private firms.
D) private firms have information that they choose to pass along to the government.

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party has more information than the other party in a transaction. This can lead to the party with more information taking advantage of the other party, resulting in an inefficient outcome.

Asymmetric Information Is a Situation in Which