Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run. if the price of heating oil rises from $1.90 to $2.10 per gallon, the quantity of heating oil demanded will fall by 40% in the short run and by 14% in the long run. the change issmaller in the long run because people can respond less easily to the change in the price of heating oil.

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers? a. change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover. b. eliminate a requirement that members of the board of directors must hold a high percentage of their personal wealth in the firm's stock. c. for a firm that compensates managers with stock options, reduce the time before options are vested, i.e., the time before options can be exercised and the shares that are received can be sold. d. pay managers large cash salaries and give them no stock options. e. beef up the restrictive covenants in the firm's debt agreements.