An Example of the Principal-Agent Problem Occurs When

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.