In the employer-worker relationship, the employer is regarded as the "principal" and the worker is regarded as the "agent."

Which of the following is true of a duopoly with differentiated products?

A) A firm loses all its customers when its rival lowers the price of its product. B) A firm does not lose all its customers when its rival lowers the price of its product. C) A firm faces a perfectly elastic demand curve. D) A firm faces a perfectly inelastic demand curve.

If the demand for labor increases

I. employment increases. II. the real wage rate increases. A) Only I is correct. B) Only II is correct. C) Both I and II are correct. D) Neither I nor II is correct.