Multiple Choice
Which of the following is an example of the monitoring problem?
A) Government fails to stop firms hiring child labor to produce goods.
B) Two firms collude to set the market price, but the government cannot prove this conclusively.
C) The managers of a firm maximize their own salaries to the detriment of maximizing profit for the owner of the firm.
D) A firm does not take into account the air pollution caused by a coal factory when pricing its product.
Correct Answer:

Verified
Correct Answer:
Verified
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