c) managerial and marketing knowledge developed at home can be used abroad with low marginal costs.
Explanation:
Low marginal cost represents low cost associated with the functioning of bank at low cost for each additional transaction of business. This basically provides for low costing.
Since the bank is able to exercise the low marginal cost in domestic market it expects to have a low marginal cost in international market also with the expertise of management.
As the bank feels confident with the management that it would be able to keep the cost low even in international domains thus, it expects low marginal cost in international domains also.
a. Doctors pursuing their own interests rather than the interests of their patients
Explanation:
A principal is an individual or a group that entrusts a certain responsibilities to someone else (known as the agent) in an entity . The agent therefore has superior information than the principal and therefore the former makes decisions on behalf of the latter. A conflict of interest can occur when the agent pursues his own interests for personal gains and ignores the responsibility he was hired to do hence creating Principal-Agent problem. Among these choices, doctors pursuing their own interests rather than the interests of their patients will lead to principal agent problem.
A monopoly is a market structure where there is only one supplier of a product and many buyers. An example of a monopoly is Microsoft; it is a price setter in the market. Abuse of monopoly power can occur when a firm dominates the market meaning no competitors within the industry. This abuse could be in form of limiting output or setting higher prices to benefit from supernormal profits . This therefore leads to less choice for consumers.Over time, monopolies can become less innovative because they do not have competition and causing the market to fail and be inefficient; the price mechanism fails to take into account all of the costs and/or benefits of providing and consuming a good.
