Multiple Choice
Suppose a new contracting environment with an economic environment that looks more uncertain.This new contract will result in
A) an increase in the marginal cost and result in a longer optimal contract.
B) an increase in the marginal cost and result in a shorter optimal contract.
C) a decrease in the marginal cost and result in a longer optimal contract.
D) a decrease in the marginal cost and result in a shorter optimal contract.
Correct Answer:
Verified
Correct Answer:
Verified
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