Question

Asymmetric information occurs when the two parties in a market transaction do not have the same amount of information regarding the product or process involved in the transaction. True or False?

Answer 1

The statement is: True.

Step-by-step explanation:

Asymmetric Information describes a situation in which one party knows more than the other. Also, the information deficiency person could make a different decision if he knew the information had been withheld. Buy-seller negotiations are the most common types of transactions in which asymmetric information affects the result.