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tarasen57 tarasen57
wrote...
Posts: 536
5 years ago
The problem with the separation of ownership from control is that

• the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners.

• the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.

• the owner in a proprietorship may not always act in the profit-maximizing fashion because he or she may not have the experience or expertise that professional managers have.

• the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth.
Textbook 
Economics Today: The Micro View

Economics Today: The Micro View


Edition: 19th
Author:
Read 58 times
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Replies
wrote...
5 years ago
the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth.
tarasen57 Author
wrote...
5 years ago
Thank you for answering so quickly
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