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Managers in a Firm Hired to Improve the Firm's Profitability

Question 5

Multiple Choice

Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if they pursue their own self-interests. What does this best illustrate?


A) diseconomies of scale
B) principal-agent problem
C) experience-curve effects
D) information asymmetries

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