What Result Could Private Contracts Between Parties with Mutual Interests

question 147

Multiple Choice

What result could private contracts between parties with mutual interests lead to

• A)They can only reduce the well-being of society.
• B)They will always lead to market outcomes in which the public interest is sacrificed for personal gain.
• C)They can solve some inefficiencies associated with positive externalities.
• D)They will always cause negative externalities to arise.

---

Definitions:

Responsibility Center

A business segment or department within an organization whose manager is accountable for specific financial and operational outcomes.

Investment Center

A business segment within a company for which the manager is responsible for generating revenue and controlling costs, with the ability to make significant investment decisions.

Department Manager

An individual responsible for overseeing a specific department within a company, ensuring its efficient operation and alignment with the organization's goals.

Investment Turnover Factor

A ratio measuring the efficiency of a company in generating sales or revenue from its investment in assets.