▪ Why profit maximization? o Why do we use firms? ▪ Reducing costs-esp. transaction costs, agency costs… ▪ Coase-firm reduce transaction costs ▪ Choice between the firm and the market ▪ Transaction costs versus agency costs Agency and Partnership Law • Agency Cost Theory: Focuses on how actions of the agent affect interests of the principal. Corporate law is largely about addressing agency costs (in…
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