Multiple Choice QuestionBecause a firm's entrepreneurs receive only the revenue left over after all other factors of production have been paid, they are considered Blank______.Multiple choice question.incentive functionsexecutivesstockholdersresidual claimants
Question
Multiple Choice QuestionBecause a firm's entrepreneurs receive only the revenue left over after all other factors of production have been paid, they are considered Blank______.Multiple choice question.incentive functionsexecutivesstockholdersresidual claimants
Solution
The correct answer is "residual claimants". This is because after all the costs of production (like wages, rent, interest) are paid off from the revenue, the remaining profit (residual) is claimed by the entrepreneurs or the owners of the firm. Hence, they are referred to as residual claimants.
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