In practice,the cost minimization strategy can be more expensive than the opportunity maximization strategy.
Which of the following is a way in which the cost minimization strategy is less expensive than the opportunity minimization strategy?
A)the loss of unexpected opportunities
B)the cost of extensive monitoring mechanisms
C)the costs of writing detailed contracts
D)the prevention of opportunistic behavior by the partner(s)

Question

Quizplus · Accepted Answer

The cost minimization strategy aims to prevent opportunistic behavior by the partner(s) through specific contractual arrangements, which can be less expensive than continuously monitoring and detecting any opportunities that may arise. Option A is incorrect because the cost minimization strategy does not incur any loss of unexpected opportunities. Option B is incorrect because the cost of extensive monitoring mechanisms is generally higher than the cost of specific contractual arrangements in the cost minimization strategy. Option C is incorrect because the cost of writing detailed contracts is higher in the cost minimization strategy than in the opportunity maximization strategy.

In Practice,the Cost Minimization Strategy Can Be More Expensive Than