Suppose resources are directed through the actions of a centralplanner, who receives information on all the different uses ofthese resources. Why might sellers have an incentive to provideuntruthful information to the central planner?
A)They want to be able to charge the minimum price for their product
B)In order to continue producing their product, sellers may overstate the importance of their product.(True Answer
)Correct
C)The information system is too complex to provide correct information.
D)They want resources to be able to travel to the highest value uses possible

Question

Quizplus · Accepted Answer

Sellers may have an incentive to provide untruthful information to the central planner in order to continue producing their product by overstating its importance.

Suppose Resources Are Directed Through the Actions of a Centralplanner