The VHS rental market, lead primarily by Blockbuster for decades, has largely been decimated by streaming services like Netflix. The demise of the rental market is due in large measure to moral hazard opportunism adverse selection (WRONG) creating destruction

The VHS rental market, lead primarily by Blockbuster for decades, has largely been decimated by streaming services like Netflix. The demise of the rental market is due in large measure to moral hazard opportunism adverse selection (WRONG) creating destruction

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 5MC

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Concept explainers

Moral Hazard

The moral is a person's behavior towards himself /herself, society, organization, and others. Hazard is something that is happening and is not good. A person may be morally good or bad. It depends on his attitude, ethics, integrity, and values. A person may have the highest reverence for money to that for the truth. In this case, the person may lie and it is said that the person is morally bad.

Question

The VHS rental market, lead primarily by Blockbuster for decades, has largely been decimated by streaming services like Netflix. The demise of the rental market is due in large measure to

moral hazard

opportunism

adverse selection (WRONG)

creating destruction

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