Chapter 11, Monopoly

Please kindly explain why it is true or false ;-)

16. A film director has signed a contract in which the production studio promises to pay her $1,000,000 plus 5 percent of the studio's rental revenues from the film, all of whose costs of production and distribution are fixed. True or false: If both the director and the studio care only about their own financial return from the project, then the director will prefer a lower film rental price than will the studio. (LO3)