Final answer:
True, information processing obstacles lead to distorted demand information in the supply chain, causing the bullwhip effect due to imperfect or asymmetric information.
Step-by-step explanation:
The statement is true: information processing obstacles do refer to situations where demand information is distorted as it moves through different stages of the supply chain. This distortion can lead to increased variability in orders, which is often known as the 'bullwhip effect.' In the context of imperfect information, economic transactions can be negatively impacted when parties have less than full certainty about what they are buying or selling, or when there's asymmetric information with one party having more information than the other. These market frictions can lead to a decline in prices or quantities of products sold. Buyers and sellers must find ways to overcome these obstacles through various mechanisms to ensure mutually beneficial transactions despite the information gap.