The Costs Associated with Principal-Agent Relationships Are Called _____

question 5

Multiple Choice

The costs associated with principal-agent relationships are called _____.

• A) principal costs 
• B) opportunity costs 
• C) agency costs 
• D) actual costs

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Definitions:

Pollution

The presence in or introduction into the environment of a substance or thing that has harmful or poisonous effects.

External Benefit

A positive effect experienced by unrelated third parties resulting from a transaction or activity.

Subsidizing

The act of a government or organization providing financial support to reduce the cost of goods or services, often to encourage production or consumption.

External Benefit

A benefit that affects parties other than the buyers or sellers involved in a transaction, similar to a positive externality.