In an increasingly complex equity market, understanding the nuances of market microstructure can have significant implications for trading strategies and market efficiency. Consider a scenario involving two types of orders: limit orders and market orders.
A limit order specifies the maximum price that the trader is willing to pay or the minimum price that they are willing to accept for a security. In contrast, a market order is executed immediately at the current market price. Given this context, which statement best reflects the impact of market orders on price discovery compared to limit orders?