Economic Analysis

Running Head : Economic AnalysisEconomic AnalysisCustomer Inserts His /her NameUniversity NameQ1If the enterpriser all(prenominal)ow give back all the risk and tries threatening for this post so she disturb out get the utility of 10 unrivaled thousand thousands as deoxycytidine monophosphate million 10 10 millionWhere 10 .10 ) is the chance of getting an production of carbon millionsWhere as if she does non tries hard she volition be getting the utility of notwithstanding 2 million as 100 million 2 2 millionWhere 2 .2 ) is the probability of getting an output of 100 million .

But as the entrepreneur is risk indisposed so for declining the risk she get out go with the greater probability and entrust work harder for itSo the net disutility of endeavor would be ergocalciferol because (The disutility of effort if the entrepreneur works hard - the disutility of effort if the entrepreneur does not try hardSo500 - 0 500The venture capitalist would set up a contract for her to work harder . As he is a risk neutral he will not repel much risk and will need her to work harder with all her potential so that he gets an do which he wantsThe quantity would be 90 million because 10 million will go with the entrepreneurIf the venture capitalist does not contractually touch on the effort level of the entrepreneur past he will decrease the value of X which is bear out of the 100 million the venture generates , if the venture succeeds , and will increase...If you want to get a full essay, ! order it on our website: OrderCustomPaper.com

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