Consider a firm producing a single well with selling price p. The cost to produce q units is q2/2 

1. What’s the optimal value of q for the shareholder? Now assume that a manager receives a compensation given by 5% of the profits plus a private benefit of 0.05q. 

2. What value of q would the manager choose?

Answer rating: 100% (QA)

Difference between economic costs and accounting costs The economic costs include the opportunity costs Example Suppose you start a business the expected revenue is 50000 per year the total costs of s... View the full answer