Question

_______________ is a situation where sellers have information that buyers don't.

a.Asymmetry

b.adverse information

c.adverse competition

d.negative externality

Answer 1

Asymmetric information can be defined as information failure because in this situation one party have more information compare to another party when economic transaction takes place.

Generally the sellers of used goods have more knowledge about the used goods because he/she has used it many times and buyers have very limited knowledge about the product.

Hence it can be said that Asymmetry is a situation where sellers have information that buyers don't.

Hence option a is the correct answer.