An example of the principal-agent problem is when
A) managers try to cope with employees that are inefficient.
B) proprietors don't receive any money payment for their entrepreneurial skills.
C) managers devise penalties that eliminate employee waste.
D) managers devise incentives that encourage employees to act in the owner's behalf.

Question

Quizplus · Accepted Answer

Managers devise incentives that encourage employees to act in the owner's behalf.

An Example of the Principal-Agent Problem Is When