Answer to Question #208649 in Microeconomics for ella

Question

. Explain how transaction cost and imperfect information affects business management on the attainment of profit.

Answer 1

Many economic transactions take place in the presence of incomplete knowledge, in which the buyer, seller, or both are unsure of the quality of the goods being bought and sold. It may be difficult for a market to exist when information about product quality is significantly poor. As a result, earnings are modest.