The developer of a new shopping mall is negotiating the terms of a store lease with a

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The developer of a new shopping mall is negotiating the terms of a store lease with a sporting goods firm. The developer is pressing the store for an increase in monthly rent. The store offers to pay the developer 1 percent of its first year’s revenues in return for a lower monthly rent, and the developer agrees. Why might this more complicated contract be mutually beneficial? Explain briefly.

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Managerial economics

ISBN: 978-1118041581

7th edition

Authors: william f. samuelson stephen g. marks

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