Final answer:
Vendor fraud c) is committed by vendors providing inferior goods or overbilling and the victims are often businesses or individuals paying for these goods. Imperfect and asymmetric information can create opportunities for such fraud. To alleviate concerns due to imperfect information, sellers can offer warranties, certifications, and references.
Step-by-step explanation:
When vendors overbill or provide lower quality or fewer goods than agreed upon, this is an example of vendor fraud. In this situation, the perpetrator of the fraud would be the vendor engaging in dishonest practices, while the victim would typically be the business or individual receiving and paying for the inferior goods or services. This fraudulent activity can have substantial effects in situations involving imperfect information and asymmetric information. In the marketplace, both buyers and sellers occasionally operate with imperfect information regarding the quality or authenticity of goods and services. Asymmetric information occurs when one party has more information than the other about the transaction, which can lead to unethical practices like vendor fraud.
Concerning the options provided, embezzlement is an example of corporate crime where an employee misappropriates funds from their employer. While imperfect information can lead to a decline in prices or quantities of products sold, businesses and consumers create mechanisms like contracts, warranties, and reputation systems to facilitate mutually beneficial transactions even in the face of imperfect information.
To reassure a buyer who is worried about imperfect information, a seller might provide warranties, product demonstrations, or obtain certifications to verify the quality of the goods. They might also provide references or facilitate third-party inspections to establish trust.