Question

In a short essay (several paragraphs) explain why businesses and consumers cannot get or choose not to get full information, and instead operate in a condition of imperfect information.

Answer 1

Business tend to operate on principles of imperfect information when they do not have complete information of products quantity and quality and sometimes may lead to market failure.

However there are times when buyers tend to buy products even if imperfect information is available due to factors like low prices and higher margins.

In this case buyers pass on low prices to customers .

Customers too tend to buy products with least or imperfect information to try out in lieu of getting at low prices and hence both tend to operate in imperfect conditions.