One argument against using a profit-sharing scheme is the potential for free-riding. In this situation, free-riding refers to
A. one firm using the same contract specifications as another firm.
B. a worker not providing effort because his contribution to profit is very small.
C. profits being insensitive to worker effort because all increases in profit are returned to the workers due to the profit-sharing scheme.
D. the firm not honestly reporting its profits.
E. a worker not providing effort because he does not want his coworkers' wages to increase.
Answer: B
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