Agency problems arise because
A)some people just don't get along.
B)the principal is shirking from her responsibility.
C)people usually act in their own best interest.
D)you can never make much money working for someone else.

Question

Quizplus · Accepted Answer

Agency problems arise because individuals or agents usually act in their own self-interest rather than the principal's interest. This creates a conflict of interest, which results in agency problems. The principal-agent relationship is often seen in corporate governance, where the board of directors is the agent, and the shareholders are the principal. The board of directors is responsible for making decisions in the best interest of shareholders, but they may act in their self-interest, resulting in agency problems.

Agency Problems Arise Because