In direct finance, funds are loaned and borrowed through a financial intermediary

A professional basketball franchise is trying to assemble a parcel of land to build an arena. There are 25 houses on the land the franchise needs. In this case,

A) eminent domain can reduce transactions costs and make a pie-increasing arena possible. B) eminent domain can reduce the likelihood of holdouts and make a pie-increasing arena possible. C) eminent domain is not called for as the land can probably be acquired more efficiently through bargaining. D) Both A and B are correct.

According to your textbook, what is the general rule to follow in order to maximize net revenue?

A) Take any action if, but only if, the expected marginal revenue exceeds the expected marginal cost. B) Take any action you expect will not be copied by your competitors. C) Take as many innovative actions as you can, and leave the copying up to smaller firms in the market because they are least likely to increase their market share. D) Charge the lowest possible price.