In the case where cigarette firms conceal information about the negative externalities associated with cigarette smoking, the market is said to be characterized by
A) asymmetric information
B) moral hazard
C) social cost
D) government failure
E) greed

Question

Quizplus · Accepted Answer

Asymmetric information occurs when one party in a transaction has more or superior information compared to another. In this scenario, cigarette firms have more information about the harms of smoking than consumers, leading to an imbalance in the market.

In the Case Where Cigarette Firms Conceal Information About the Negative