Asymmetric information in a market transaction occurs when there is unequal knowledge possessed by the
A) buyer and the government.
B) seller and the government.
C) taxpayer and the government.
D) buyer and the seller.

Question

Quizplus · Accepted Answer

Asymmetric information refers to a situation where one party in a market transaction has more information than the other party. In this case, the options A, B, and C do not involve the buyer and the seller, who are the primary parties in a market transaction. Therefore, the correct answer is D, where the buyer and the seller have unequal knowledge.

Asymmetric Information in a Market Transaction Occurs When There Is