With Asymmetric Information Firms Might Be Reluctant to Improve the Quality

question 51

Multiple Choice

With asymmetric information firms might be reluctant to improve the quality of their products because

• A) it costs them more to produce the better quality product.
• B) they are not able to completely capture the benefits of the improvement.
• C) consumers do not value the better product.
• D) consumers are better informed about the product and value the new product less.

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Definitions:

Policy Advocate

An individual who actively supports and argues for the implementation or reform of specific policies for public benefit.

Enact

The process of making a bill into law by legislative authority.

Reform

The process of making changes to something in order to improve it, often in the context of social, political, or economic institutions.

Elected Official

An individual who has been chosen through a democratic process to hold a public office.