Suppose a New Contracting Environment That Requires Less Specialized Investments

Multiple Choice

Suppose a new contracting environment that requires less specialized investments is considered.This new contract will result in

A) an increase in the marginal benefit and result in a longer optimal contract.
B) an increase in the marginal benefit and result in a shorter optimal contract.
C) a decrease in the marginal benefit and result in a longer optimal contract.
D) a decrease in the marginal benefit and result in a shorter optimal contract.