Which concept describes the economic situation where buyers have complete information about products and prices?

The concept that describes the economic situation where buyers have complete information about products and prices is known as Perfect Information. This scenario occurs when consumers possess all relevant data regarding the goods and services available in the market, including their prices and qualities. When buyers are fully informed, they can make decisions that maximize their utility because they are aware of all available options.

Having perfect information contributes to market efficiency, as consumers can easily compare products and make informed choices. This ideally leads to a more competitive marketplace where prices reflect the true value of goods and services, promoting a fair exchange dynamic. This level of information availability helps to eliminate information asymmetry, allowing for a more equitable distribution of resources in the economy.

The notion of Perfect Competition also relates closely, but it encompasses more than just information—such as the conditions of many buyers and sellers, identical products, and free market entry and exit. Perfect Information specifically focuses on the completeness of knowledge among buyers. This distinction is essential for understanding how information significantly influences market behavior and consumer decisions.