Question

Rent seeking can be a problem if a firm has

a. managers who are also majority owners                                                  

b. too much cash

c. too much debt

d. all of them

Answer 1

Answer:

Option A is right - Managers who are also majority owner

Rent Seeking means when an entity seeks to increase its wealth without giving any reciprocal contribution of productivity.

And when managers are also owners, they are more tend to manipulate public policy to increase their profit.