Which of the following statements about asymmetric information is true?

A. Asymmetric information can only be solved through government intervention.
B. Asymmetric information reduces market failures because it makes it easier for individuals to engage in transactions that in the presence of perfect information would take place.
C. Asymmetric information occurs when one party to a transaction has relevant information to the transaction that the other party does not have.
D. Asymmetric information occurs only in the market for used cars and in the insurance market.


Answer: C

Economics

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