Mr. Adams owns a textile business. In order to deal with the principal-agent problem, Mr. Adams might offer his employees
A) incentive pay.
B) long-term contracts.
C) part- ownership.
D) all of the above.

Question

Quizplus · Accepted Answer

All of the options (incentive pay, long-term contracts, and part-ownership) are strategies that can help align the interests of employees (agents) with those of Mr. Adams (principal) to mitigate the principal-agent problem.

Mr Adams Owns a Textile Business