Which of the Following Is a Tool a Firm Can

question 14

Multiple Choice

Which of the following is a tool a firm can use to combat agency problems?

• A)Monitoring
• B)Performance-Based Incentives
• C)Bureaucracy
• D)a,b & c
• E)None of the above

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Definitions:

Fixed Costs

Fixed costs are those business expenses that do not change with the level of goods or services produced, such as rent.

Break-even Sales

The amount of revenue needed to cover both the fixed and variable costs of a business, resulting in no profit or loss.

Unit Selling Price

The price at which a single unit of product is sold, not including any discounts or promotions.

Unit Variable Costs

The variable costs associated with producing one unit of a product, including materials, labor, and any other variable expenses.