i. Demand is said to be inelastic when the percentage change in price exceeds the percentage change in quantity demanded of a good. i. The tendency for managers to operate a firm in a way that maximizes their personal utility rather than the firm's profits is referred to as the principal-agent problem. ili. Although corporate goal has been diversified compared to decades ago, maximizing firm value is still the top priority goal for a firm. A. i and i B. i and in C. i and ini Di. ii, and ini 5. Suppose that the price elasticity is infinity. Which line represents it? B D. (4) 6. Which is the best statement about diminishing marginal returns? A. as a firm's output increases, the firm's marginal cost will decrease. B. as a firm employs more capital, the firm's marginal product will decrease. C. as a firm employs more capital, the firm's output will decrease. D. as a firm's output increases, the firm will employ fewer units of capital