A market system tends to restrict business risk to owners and investors. This results in which of the following benefits? Income becomes more equally distributed. Firms have to pay more to attract inputs, as these inputs have to share the risk. It encourages more people to become entrepreneurs. Firms focus attention on prudent risk management, as it is profitable to manage risk.
Added by Jay G.
Close
Step 1
This means that the owners and investors are the ones who bear the financial consequences of any risks taken by the business. Now let's analyze the options: Show more…
Show all steps
Your feedback will help us improve your experience
Jennifer Stoner and 51 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
A company faces two kinds of risk. A firm-specific risk is that a competitor might enter its market and take some of its customers. A market risk is that the economy might enter a recession, reducing sales. Which of these two risks would more likely cause the company's shareholders to demand a higher return? Why?
Christopher D.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD