An Example of the Principal-Agent Problem Occurs When

question 18

Multiple Choice

An example of the principal-agent problem occurs when

• A)an agent is more motivated than the principle to provide a high-quality good or service.
• B)managers try to cope with employees that are inefficient.
• C)sole proprietors don't receive any money payment for their entrepreneurial skills.
• D)managers devise penalties that eliminate employee waste.
• E)managers devise incentives that encourage employees to act in the owner's behalf.

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Definitions:

Service Innovation

The introduction of new or improved services to meet customer needs more effectively, often involving new technologies or business models.

Hispanic-Owned Businesses

Firms where the ownership is majorly held by individuals of Hispanic descent, often tracked for demographic and economic analysis.

Self-Employment

The status of working for oneself as a freelancer or the owner of a business rather than for an employer.

Competitive Advantage

An attribute or condition allowing a company to outperform its competitors, such as superior product quality, cost leadership, or a unique distribution network.