When information asymmetry exists in a market, the government:
A)always steps in to try to correct it.
B)never steps in to try to correct it.
C)sometimes steps in to try to correct it.
D)only steps in to correct it if complete information can be ensured.

Question

Quizplus · Accepted Answer

Governments may intervene in markets with information asymmetry (where one party has more or better information than the other) to correct imbalances, but such intervention is not guaranteed or constant. The decision to intervene depends on the specific circumstances and the potential benefits of intervention versus the costs or feasibility of addressing the asymmetry.

When Information Asymmetry Exists in a Market, the Government