Which of the following forms of business organization is likely to suffer most from the principal agent problem between the owners and managers of the business?

If unit costs decrease as the quantity of production increases and all inputs are variable, then a firm is experiencing

A) constant returns to scale. B) economies of scale. C) diseconomies of scale. D) falling economies of scope.

Paul goes to Dick's Sporting Goods to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is

A) $325. B) $200. C) $125. D) $75.