Use the Following Information to Answer Question

question 65

Multiple Choice

Use the following information to answer question:
Suppose that you are a manager.You are considering whether or not to monitor employees with the payoffs in the following normal form game.
-What should the manager do to solve the shirking problem?

• A)Always monitor.
• B)Never monitor.
• C)Sincerely tell workers not to shirk.
• D)Engage in "random" spot checks of the work place.

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Definitions:

Inelastic

Refers to a situation where the demand or supply for a good or service is not significantly altered by changes in price.

Concerts

Public performances of music by artists in front of an audience.

Relative Change

A metric that measures how much a particular quantity has changed over time relative to the initial amount.

Inelastic

A characteristic of a good or service whose demand or supply is relatively unresponsive to changes in price.