The figure compares the compensation that a shoe salesperson receives if she is on a straight salary of $40 per day or if she receives a commission of $5 for each pair of shoes sold. 100- Commission 90- Q Which compensation structure is preferred by the salesperson? 80- Suppose the salesperson sells more than 8 pairs of shoes per day and only cares about compensation. 70 60- For the salesperson, the is preferred. 50- Salary 40- 30- 20- 10 10 12 14 Pairs of shoes per day 16 18 20 Compensation received per day

The figure compares the compensation that a shoe salesperson receives if she is on a straight salary of $40 per day or if she receives a commission of $5 for each pair of shoes sold. 100- Commission 90- Q Which compensation structure is preferred by the salesperson? 80- Suppose the salesperson sells more than 8 pairs of shoes per day and only cares about compensation. 70 60- For the salesperson, the is preferred. 50- Salary 40- 30- 20- 10 10 12 14 Pairs of shoes per day 16 18 20 Compensation received per day

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter14: Labor Markets And Income

Section: Chapter Questions

Problem 17RQ: What are some of the most important laws that protect employee right?

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