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What is the principal-agent problem

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What is the principal-agent problem? When will the principal-agent problem be most severe? Why might there be a principal-agent problem between the stockholder-owners and the managers of a large corporation?

Reference no: EM13316421

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Operator will be able to make at least a normal profit : In a price-taker market, if a business operator produces efficiently-that is, if the cost of producing the good is minimized-the operator will be able to make at least a normal profit
Farmers are often heard to complain about the high costs : Farmers are often heard to complain about the high costs of machinery, labor, and fertilizer, suggesting that these costs drive down their profits
Do implicit costs contribute to the opportunity cost : What are implicit costs? Do implicit costs contribute to the opportunity cost of production? Should an implicit cost be counted as cost? Give three examples of implicit costs.
If a firm maximizes profit. it must minimize the cost : If a firm maximizes profit. It must minimize the cost of producing the profit-maximizing output.
What is the principal-agent problem : What is the principal-agent problem? When will the principal-agent problem be most severe? Why might there be a principal-agent problem between the stockholder-owners and the managers of a large corporation?
Explain why firms that are making zero economic profit are : What is economic profit? How might it differ from accounting profit? Explain why firms that are making zero economic profit are likely to continue in business.
Who will have the more elastic demand for yogurt : Sue loves ice cream but cannot stand frozen-yogurt desserts. In contrast, Carole likes both foods and can hardly tell the difference between the two. Who will have the more elastic demand for yogurt?
A consumer is currently purchasing three pairs of jeans and : A consumer is currently purchasing three pairs of jeans and five T-shirts per year. The price of jeans is $30, and T-shirts cost $10. At the current rate of consumption, the marginal utility of jeans is 60, and the marginal utility of T-shirts
Will mary take the bus or the plane which will michele taken : A bus ticket between two cities costs $50 and the trip will take twenty-eight hours, whereas an airplane ticket costs $300 and takes three hours. Mary values her time at $12 per hour

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