In Which of the Following Types of Firms Is an Agency

question 61

Multiple Choice

In which of the following types of firms is an agency problem most likely to exist?

• A)a private corporation that has only one owner and only a few employees
• B)a partnership with several owners, but only a few employees
• C)a sole proprietorship that has only one owner and one employee
• D)a publicly-held corporation that has many owners and many employees

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Definitions:

Manufacturers

Businesses or individuals involved in the production of goods using labor, machines, and tools, turning raw materials into finished products.

Upscale Manufacturers

Companies that produce high-quality, often luxury products aimed at a market segment willing to pay premium prices for superior goods.

Prestige Products

High-quality items that are marketed to appeal to consumers' desires for luxury and status rather than practicality.

Lower-priced Products

Items sold at a cost that is below the average price point, often to attract price-sensitive consumers or to compete in the market effectively.