Penny, the owner of a store, makes a deal with Arthur, her manager, that at the end
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Penny, the owner of a store, makes a deal with Arthur, her manager, that at the end of the year, she receives two-thirds of the store's profit and he gets one-third. If Arthur is interested in maximizing his earnings, will Arthur act in a manner that maximizes the store's total profit (which both Penny and Arthur can observe)? Answer using a graph.
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i Draw a diagram showing the total profit curve and use it to derive Arthurs profit ...View the full answer
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