The limit on the amount of information a manager can comprehend about a firm's operation is known as
a. adverse selection
b. bounded rationality
c. diseconomies of scope
d. managerial incompetence
e. moral hazard
B
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Which of the following is a microeconomics question?
A) What determines the average price level and inflation? B) How much will be saved and how much will be produced in the entire economy? C) What will the level of economic growth be in the entire economy? D) What factors determine the price of carrots?
A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if
A) it can lobby the government to establish a price floor for its product. B) it can find new ways to differentiate its product. C) it can move to another country where there is less competition. D) it can successfully sue its competitors for copyright infringement.