Use the Following to Answer Questions

question 252

Multiple Choice

Use the following to answer questions:
Figure: Weekly Pay
-(Figure: Weekly Pay) Firms A and B are radio stations that hire salespeople to sell advertising slots. The firms' compensation schemes appear in the figure. Assuming that all workers put in the same amount of hours, firm A pays its salespeople using a(n) ______ and firm B pays its workers using a(n) ______.

• A) hourly wage; hourly wage
• B) hourly wage; piece rate system
• C) premium plus fee; flat rate
• D) piece rate system; hourly wage

---

Definitions:

Demand Conditions

Refers to the nature and size of the market demand for goods and services in an industry.

Efficient Scale

The level of production that minimizes the average total costs of production, achieving economies of scale.

Competitive Price-Searcher

A market condition where firms actively seek to find the optimal price that balances profitability with consumer demand, typically in markets with differentiated products.

Long Run

A period of time in economics where all factors of production and costs are variable, and all adjustments to changes have been made.