Which of the Following Is an Example of a Principal-Agent

Multiple Choice

Which of the following is an example of a principal-agent problem?

A) A firm fails to earn profits because a manager mismanages the employees.
B) Workers are motivated to do their best on the job regardless of compensation.
C) Buyers opt to buy the low-cost, low-quality version of a product even though they say their primary goal is high quality.
D) Shareholders hire a CEO to increase profits, and the CEO remodels the office with expensive artwork and furnishings.