Sole proprietorships resolve the issue of agency problems by:

Question

Quizplus · Accepted Answer

Sole proprietorships force owners to bear the full cost of their actions, which is an effective way to resolve agency problems. Since the owner is the only decision-maker and manager, they will directly bear the costs of any unethical or irresponsible behavior. This creates a strong incentive for the owner to act in the best interest of the business and avoid actions that could harm the company or its stakeholders.

Sole Proprietorships Resolve the Issue of Agency Problems By