In a Store That Sells Souvenirs,suppose an Agent Receives a $1

question 52

Multiple Choice

In a store that sells souvenirs,suppose an agent receives a $1 commission for each unit sold,and the principal receives the residual profit.As a result,

• A) joint profit is maximized.
• B) the agent will sell until the principal's marginal cost equals $1.
• C) no agent would enter into such a contract.
• D) the agent wishes to sell as many units as he can.

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