Even If an Employee Cannot Enter into Contracts,a Principal-Agent Relationship

question 70

True/False

Even if an employee cannot enter into contracts,a principal-agent relationship is formed by virtue of the employment relationship itself.

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Definitions:

Maintenance

The upkeep and repair of machinery, equipment, and buildings to ensure their optimum working condition.

Shortage

A market condition occurring when the demand for a product or service exceeds the supply available at a specific price.

Equilibrium Level

The state of balance where demand equals supply in a market, resulting in an optimal distribution of resources without excess supply or demand.

Price Ceiling

A maximum legal price above which a product cannot be sold; to have an impact, a price ceiling must be set below the equilibrium price.