Since most firms are controlled by management who know more about the day-to-day operations and profitability conditions than the owners,

+1 vote
    a principal-agent problem arises when managers avoid growth and instead focus on fiscal responsibility and profits.
     a principal-agent problem arises when managers focus on growth and market share rather than long run profits.
     a principal-agent problem arises when managers are also part owners of the company.
     a principal-agent problem arises where managers pursue long-term profits rather than growth of the company.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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a principal-agent problem arises when managers focus on growth and market share rather than long run profits.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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