Which of the Following Is an Example of an Agency

question 29

Multiple Choice

Which of the following is an example of an agency problem?

• A) managers not working as diligently if they are not the sole owner of the business
• B) the board of directors firing an incompetent manager
• C) the manager owning a great deal of stock in the company
• D) a corporate raider attempting to purchase the company

Recognize the importance of express and implied terms in contract formation and interpretation.

Understand the use of injunctions in enforcing contractual terms.

Learn the doctrine of anticipatory repudiation and its effects on contractual relations.

Explore the concept of rescission and restitution in terminating contractual obligations.

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Definitions:

Short Run

A period in economics where at least one factor of production is fixed and cannot be altered.

Inputs

Resources such as labor, materials, and capital used in the production process to create goods or services.

Existing Firms

Companies or businesses that are currently in operation within a particular market or industry.

Fixed Cost

Expenses that do not change with the level of output or sales in the short term, such as rent, salaries, and insurance.