To Keep Commissions Paid to Salespeople from Becoming So High

question 4

Multiple Choice

To keep commissions paid to salespeople from becoming so high that they become demoralizing to company executives,some companies place upper limits on how much a sales representative can earn.This limit is called a:

• A) draw.
• B) bonus.
• C) base.
• D) cap.
• E) ground rule.

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Definitions:

Equal Satisfaction

A principle in consumer choice theory that suggests consumers allocate their resources to maximize satisfaction or utility.

Indifference

A state where a consumer has no preference between two or more choices.

Utility

An economic term referring to the total satisfaction received from consuming a good or service.

Indifference Curve

A graphical representation showing different combinations of goods or services among which a consumer is indifferent, implying no preference for one combination over another, given their utility or satisfaction remains constant.