The principal-agent problem of ownership vs. control of the ...

[notis]

The principal-agent problem of ownership vs. control of the corporation tends to get worse when
 
  A) stock in a corporation is held exclusively by a small number of people who control the company's day-to-day operations.
  B) stock in the company is tightly held, but there are some outsider stockholders.
  C) stock in the company is very diffusely held, with no individual or group having control over a large block of stock.
  D) managers have profit-sharing schemes as part of their incentive package.
  E) managers focus on maximizing the firm's profits, rather than the firm's market share.

Question 2

Which is true of output-choice models of oligopoly behavior?
 
  A) Both the Stackelberg and Cournot models can be constructed as sequential games.
  B) The Stackelberg, but not the Cournot, model can be constructed as a sequential game.
  C) The Cournot, but not the Stackelberg, model can be constructed as a sequential game.
  D) Neither the Cournot nor the Stackelberg model can be constructed as a sequential game, but other output-choice models can be.
  E) There is no relationship between any output-choice model and sequential games.

[pami445]

Answer to Question 1

C

Answer to Question 2

B