If an agent puts forth a high level of effort, the firm's expected revenues are $62,000. If shirking occurs, expected revenues are $49,000. The firm must pay the agent at least $40,000 to join the firm and make the high effort. At least $20,000 must be paid to get the worker to join the firm and make the low effort. The principal would prefer the worker to join the firm and put forth
A) no effort
B) the low-effort level
C) the high-effort level

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The Answer of If an agent puts forth a high level of effort, the firm's expected revenues are $62,000. If shirking occurs, expected revenues are $49,000. The firm must pay the agent at least $40,000 to join the firm and make the high effort. At least $20,000 must be paid to get the worker to join the firm and make the low effort. The principal would prefer the worker to join the firm and put forth
A) no effort
B) the low-effort level
C) the high-effort level

If an Agent Puts Forth a High Level of Effort