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Principle Agent Problem
The principle agent problem arises when one party [agent] agrees to work in favor of another party [principle] in return for some incentives.
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Producer Surplus
Producer surplus is defined as the difference between the amount the producer is willing to supply goods for and the actual amount received by him when he makes the trade.
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Definition: The transfer of ownership, property or business from the government to the private sector is termed privatization. The government ceases to be the owner of the entity or business.
The process in which a publicly-traded company is taken over by a few people is also called privatization. The stock of the company is no longer traded in the stock market and the general public is barred from holding stake in such a company. The company gives up the name 'limited' and starts using 'private limited' in its last name.
Description: Privatization is considered to bring more efficiency and objectivity to the company, something that a government company is not concerned about. India went for privatization in the historic reforms budget of 1991, also known as 'New Economic Policy or LPG policy'.
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PREV DEFINITION
Principle Agent Problem
The principle agent problem arises when one party [agent] agrees to work in favor of another party [principle] in return for some incentives.
Read More
NEXT DEFINITION
Producer Surplus
Producer surplus is defined as the difference between the amount the producer is willing to supply goods for and the actual amount received by him when he makes the trade.
Read More
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