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Incentives and Behavioral Responses
Worksheet
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Economics & Financial Literacy
12.3 Incentives and Behavioral Responses
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Use the accompanying supplier-performance table. Which response best follows from the bonus rule?
A
The buyer will stop receiving shipments after creating a bonus.
B
Suppliers will reduce on-time shipments because timeliness is rewarded.
C
Defect rates must fall because the bonus ignores defects.
D
On-time shipments may rise while product defects also increase.
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