Economics 9708 · AS & A Level · Information failure

Information failure — practice question

What is most likely to give rise to the principal-agent problem?

  • Aa manager of a business makes decisions on behalf of the owner
  • Bmusic festival tickets are purchased by a person who intends to sell them at a large profit
  • Cthe government is the only buyer of a pharmaceutical product
  • Dthere is only one firm that manufactures the product

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