When asymmetric information affects a relationship between two parties, it is always the case that
A)neither party is well informed.
B)one party is better informed than the other party.
C)both parties are equally well informed.
D)the government is better informed than either of the two parties.

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party in a transaction has more or superior information compared to the other. This imbalance can lead to inefficiencies in the market, such as moral hazard or adverse selection.

When Asymmetric Information Affects a Relationship Between Two Parties, It