Ron Is Considering the Use of Straight Salary for His

question 68

Multiple Choice

Ron is considering the use of straight salary for his new sales force.He thinks this is appropriate because:

• A)It is difficult to measure each salesperson's impact on sales volume.
• B)He wants to motivate short-term selling efforts.
• C)He wants to encourage sales success.
• D)It will provide additional rewards to top performers.

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Definitions:

Substitute Resource

Alternative resources or inputs that can be used in place of another in the production process to produce a similar type of output.

Productivity

The efficiency with which input resources are converted into outputs, often measured as the ratio of output to input in a given time period.

Law of Diminishing Returns

The principle that as investment in a single factor of production increases, holding all others constant, the incremental gains in output will eventually decrease.

Law of Diminishing Marginal Utility

states that as a person consumes more of a good or service, the utility (satisfaction) gained from each additional unit decreases.