Asymmetric information occurs when A. people engaging in a transaction are uncertain about future events. B. the information available to the people in a transaction is misleading or incomplete. C. everyone has the same information. D. one person in a transaction has more information than the other.

Question

Business

Guest

9 July, 13:55

Asymmetric information occurs when A. people engaging in a transaction are uncertain about future events. B. the information available to the people in a transaction is misleading or incomplete. C. everyone has the same information. D. one person in a transaction has more information than the other.

+4

Answers (1)

Know the Answer?

Cael Huang · Answer 1

D. one person in a transaction has more information than the other.

Explanation:

Asymmetric information

It is also referred to as the information failure, it occurs when one of the party during an economic transaction has more material knowledge than the other party.

For example,

When the seller of the goods and service have more knowledge than the buyer, but the reverse can also be true, i. e., the buyer having more knowledge.

In most of the economic transaction, the information asymmetries are observed.