QUESTION 7 David is a real estate agent who receives a commission of 2% of the sale price of a property. Denise and Derick are looking to sell their home in Coorparoo. If the house is sold now it will only sell for 1 million dollars. If they wait three months, and Denise and Derick are happy to do so, the house will sell for 1.1 million dollars. Which of the following statements are true: As David is working on behalf of Denise and Derick he will follow their wishes. This is an example of the Principal-Agent Problem as the two parties have the same objectives yet Denise and Derick can directly observe David's actions. The Principal-Agent problem never results in the best outcome for the principal or an efficient outcome for society. David will only receive an extra $2,000 from waiting three months to sell Denise and Derick's property. David therefore has an incentive to accept the lower price for Denise and Derick's property now, and then begin to sell other million dollar properties in the area