Looking for the correct answer to the following: Thanks! An employer faces two t

Question

Looking for the correct answer to the following: Thanks!

An employer faces two types of employees. Regular workers are 70% of the population and generate $100,000 in productivity. Exceptional workers are 30% of the population, and generate $120,000 in productivity. Employees know their types, and reject salaries below their productivity. If the employer offers a salary equal to the average productivity in the population, what will be the employer’s per-employee profit?

Select one: a. $0 OR b. -$6,000

Explanation / Answer

Type of Employee Productivity $ P (Productivity*p) $ Regular 100,000 0.7                        70,000 Exceptional 120,000 0.3                        36,000 220,000 Total                      106,000 Average productivity($220,000/2) a          110,000 Average productivity on Population b          106,000 Profit per Employee (a-b)               4,000

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