What Prevents a Firm from Offering a Delayed-Compensation Scheme to Its

What prevents a firm from offering a delayed-compensation scheme to its employees and then firing each worker when the worker's wage exceeds his or her value of marginal product?

A) Firms that offer delayed-compensation schemes are legally barred from firing workers.
B) Profits would increase by allowing the worker to continue on.
C) The worker will have already retired by the time the worker's value of marginal product exceeds his or her wage.
D) Profits are insensitive to when the worker quits his job.
E) The firm would lose the trust of the workers, and new workers would not accept the payment scheme.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free