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 occurs when the buyer and the seller have unequal knowledge about the product or service being bought or sold. The government and taxpayer are not necessarily involved in the transaction, and therefore cannot have unequal knowledge. Therefore, the correct answer is D.

Asymmetric Information in a Market Transaction Occurs When There Is