Which of the Following Is an Example of the Monitoring

question 30

Multiple Choice

Which of the following is an example of the monitoring problem?

• A) Government fails to stop firms hiring child labor to produce goods.
• B) Two firms collude to set the market price, but the government cannot prove this conclusively.
• C) The managers of a firm maximize their own salaries to the detriment of maximizing profit for the owner of the firm.
• D) A firm does not take into account the air pollution caused by a coal factory when pricing its product.

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Definitions:

Competitors

Other entities that offer similar goods or services within the same market, vying for the same customer base.

Organization Design

The creation or rearrangement of an organization's structure to align it more closely with its objectives, strategies, and processes.

Competitive Advantage

The unique attributes or circumstances that enable an organization to outperform its competitors.

Michael Porter

An influential academic known for his theories on economics, business strategy, and competitive advantages.