A Drawback of Separating Ownership from Control by Creating a Firm

question 113

Multiple Choice

A drawback of separating ownership from control by creating a firm is:

• A) the losses of specialization.
• B) increased transaction costs.
• C) the principal-agent problem.
• D) synergies of team production.

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Definitions:

Dependent Variable

The variable in a study that represents the result of the events and processes.

Aggressive Behavior

Characterizes actions or practices that are intended to harm or intimidate another person, whether physically, verbally, or psychologically.

Hypothesis

An idea about the possible nature of reality; a prediction tested in an experiment.

Testable Prediction

A forecast or hypothesis that can be verified or disproved through experimentation or observation.