Question Completion Status: QUESTION 18 A shoe salesman working on commission mu

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Question Completion Status: QUESTION 18 A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the prot tyof a sale from 20% to 70 the efort would cost him SS. If the commission on a typical pair of shoes was $12, would he decide to work hard? a. No, because it costs him more in effor 0. Yes because it is higher than zero C Yes because it is higher than what it costs him in effort d. None of the above QUESTION 19 1 po You are considering buying a store. In order to better assess your returm on the investment, you must Click Save and Submit to save and submit. Click Save All Answers to save all answers Save AN Answers 5 8 W E R O P S D F GHJ K L Alt Ctrl

Explanation / Answer

Answer:-  A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20% to 70% but would cost him $5. If the average price of shoes is $12 what is the minimum commission rate that would induce him to work hard?

Correct option:- Yes, it is higher than what it costs him in efforts

Reason:- If the salesman does not work hard, the earnings will be = 0.2*12=2.4

If he works hard then = 0.7*12 =8.4

so working hard provides him greater values

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