Pirnciple Agent Problem Flashcards
1
Q
What is it?
A
When principles (shareholders) have different incentives to agents (managers). Managers may elect to achieve sales maximisation as they may be paid via how many sales they make - in this case sales maximisation will be pursued
2
Q
What barriers to entry in a monopoly market
A
Patents
Product differentiation
Advertising
All able monopoly to vary their prices above their mc curve
