Suppose General Motors is trying to hire a small firm to manufacture the door handles for Pontiac

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Suppose General Motors is trying to hire a small firm to manufacture the door handles for Pontiac sedans. The task requires an investment in expensive capital equipment that cannot be used for any other purpose. Why might the president of the small firm refuse to undertake this venture without a long-term contract fixing the price of the door handles? (LO4)

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Principles Of Microeconomics

ISBN: 9780521775267

2nd Brief Edition

Authors: Robert Frank, Ben Bernanke

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