Which of the following exemplifies an opportunistic behavior by a franchisor arising out of incompleteness or ambiguity in a contract?
a. Providing inferior service in an attempt to cut operating costs.
b. Terminating a well-operated franchisee and converting the establishment into a profitable company-owned outlet.
c. Fixing exorbitant prices for products having relatively elastic demand.
d. Terminating a franchisee who had been using the company brand name to endorse products that the agreement says it cannot.
B
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Suppose that the nation wide average cost of air pollution generated by a car is $1,000. Would a tax of $1,000 on every car induce people to take external costs into consideration and bring about the optimal price and output for autos? Explain
What will be an ideal response?
The features of the M-Form of firm organization are
a. divisions can respond more easily to change b. it is difficult to maintain customer relationships c. coordination across divisions is simple and does not take much management time d. evaluating employees is easier because managers typically are similarly trained