Which of the Following Best Describes Profit Sharing

question 77

Multiple Choice

Which of the following best describes profit sharing?

• A) A gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard
• B) An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary
• C) A group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees
• D) A combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay
• E) An incentive plan where a percentage of the previous year's profits is provided to the employees as a part of their salary

---

Definitions:

Market-Equilibrium

A condition where the supply and demand in the market equalize, leading to stable prices.

External Cost

A cost borne by individuals or society that is not reflected in the market price of a good or service, often associated with negative externalities.

Socially Optimal

A condition or point at which the welfare of a society reaches its highest possible level, considering all factors and resources.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded.