Which of the following statements is true in the context of principal–agent relationships? a. The agency relationship is confined to the top management and does not continue down the hierarchy within the company. b. Agents almost always have more information about the resources they are managing than the principals do. c. Information asymmetry can make it easier for principals to measure how well an agent is performing. d. In a principal–agent relationship, the decision–making power rests entirely with the principals. e. The relationship between the company and the suppliers is an example of a principal–agent relationship

4. suppose that pollution in a neighborhood comes from two factories, with marginal benefit curves given by mb1 = 12 – p1 and mb2 = 8 – p2. the level of pollution in the neighborhood is given by p = p1 + p2. the government wants to limit pollution by instituting a pollution-rights market. the government’s desired level of p is 10, so it prints 10 pollution rights and offers them for sale to the firms.a)find the equilibrium selling price of a pollution right, as well as the allocation of rights (and hence pollution levels) across the two factories. b)repeat part (a) for the case where the government’s desired level of pollution equals 14. c)comment on the usefulness of a pollution rights market in achieving efficient levels of pollution abatement.