If global markets are imperfect, a disproportionate share of profits is likely to end up with shareholders, rather than employees.

Question

Quizplus · Accepted Answer

This statement is true because in imperfect markets, shareholders have more bargaining power and can negotiate higher profits, while employees may not have as much bargaining power and may receive lower wages or fewer benefits. Therefore, a disproportionate share of profits is likely to go to shareholders rather than employees.

If Global Markets Are Imperfect, a Disproportionate Share of Profits