The Hold-Up Problem Increases a fiRm's Transaction Costs Because _____

question 69

Multiple Choice

The hold-up problem increases a firm's transaction costs because _____.

• A) the scarcity of raw materials increases the costs of production
• B) labour unions hold-up production in order to bargain for higher wages
• C) the firm is dependent upon one buying relationship
• D) the assets involved in a hold-up problem are general in nature

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Definitions:

Stakeholder Needs

The requirements or demands of individuals or groups directly or indirectly affected by an organization's actions.

Stakeholder Orientation

A business approach that values and considers the interests and well-being of all individuals and entities affected by the company's actions.

Corporate Governance

The framework of rules, practices, and processes by which a company is directed and controlled, focusing on balancing the interests of its stakeholders.

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and disclose the results in a transparent manner.