Question

Consumers will willingly make less-informed decisions: a. ​ if information costs are less than the perceived benefits of gathering information. b. ​ since ignorance always leads to bliss. c. ​ whenever acquiring more information requires sacrifice. d. ​ if information costs are greater than the perceived benefits of gathering information.

Answer 1

Answer:

The correct answer is option d.

Explanation:

In a perfectly competitive market, it is assumed that the buyers and sellers have perfect information and take their economic decisions accordingly. But in reality, buyers and sellers do not have perfect information.

Information comes at a cost, which can sometimes be high. The rational decisions of the consumers without full information can lead to irrational outcomes.

If the cost of gathering information is less than or equal to the benefit earned from the information, the consumers will gather information and make fully informed decisions.  

But if the cost is higher than the benefits, the consumers will not gather information and make a less informed decision.