Economics (Book Only)
12th Edition
ISBN: 9781305465459
Author: Arnold
Publisher: Cengage
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Question
Chapter 22, Problem 1VQP
To determine
The Alchian–Demsetz theory of firm.
Expert Solution & Answer
Explanation of Solution
This theory was developed by the economists Armen Alchian and Harold Demsetz. They suggest that a firm is formed by a group of people who are working together. The productivity of this group of people is more than that of an individual’s production. One of the important problems associated with this group work is that the tendency to reduce the agreed effort by the participants, while the accurate intervention of the monitor or the manager reduces this problem to an extent. That is, the monitor rewards efficient workers and punishes idlers. This would help the monitor to preserve the team’s benefits and reduce the monitor’s incentive to shirk.
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Chapter 22 Solutions
Economics (Book Only)
Ch. 22.2 - Prob. 1STCh. 22.2 - Prob. 2STCh. 22.2 - Prob. 3STCh. 22.2 - Prob. 4STCh. 22.3 - Prob. 1STCh. 22.3 - Prob. 2STCh. 22.3 - Prob. 3STCh. 22.4 - Prob. 1STCh. 22.4 - Prob. 2STCh. 22.4 - Prob. 3ST
Ch. 22.4 - Prob. 4STCh. 22.5 - Prob. 1STCh. 22.5 - Prob. 2STCh. 22.5 - Prob. 3STCh. 22 - Prob. 1VQPCh. 22 - Prob. 2VQPCh. 22 - Prob. 3VQPCh. 22 - Prob. 4VQPCh. 22 - Prob. 5VQPCh. 22 - Prob. 1QPCh. 22 - Prob. 2QPCh. 22 - Prob. 3QPCh. 22 - Prob. 4QPCh. 22 - Prob. 5QPCh. 22 - Prob. 6QPCh. 22 - Prob. 7QPCh. 22 - Prob. 8QPCh. 22 - Prob. 9QPCh. 22 - Prob. 10QPCh. 22 - Prob. 11QPCh. 22 - Prob. 12QPCh. 22 - Prob. 13QPCh. 22 - Prob. 14QPCh. 22 - Prob. 15QPCh. 22 - Prob. 16QPCh. 22 - Prob. 17QPCh. 22 - Prob. 18QPCh. 22 - Prob. 19QPCh. 22 - Prob. 1WNGCh. 22 - Prob. 2WNGCh. 22 - Prob. 3WNGCh. 22 - Prob. 4WNGCh. 22 - Prob. 5WNGCh. 22 - Prob. 6WNGCh. 22 - Prob. 7WNG
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