Salespeople Want a Compensation System That Is All of the Following

question 18

Multiple Choice

Salespeople want a compensation system that is all of the following EXCEPT:

• A)understandable
• B)one that bases rewards on effort and results
• C)inexpensive to administer
• D)equitable
• E)uniform within the company

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Definitions:

Marginal Cost

Marginal cost is the additional cost incurred in the production of one more unit of a good or service.

Average Total Cost

The per unit cost of production, calculated by dividing the total costs (fixed and variable) by the total quantity of output produced.

Economic Profits

The excess of a firm's total revenues over its opportunity costs, reflecting profitability beyond the normal return on investment.

Competitive Price-searcher Market

A market in which firms have some control over prices because their products are differentiated, but they still face competition and must search for competitive pricing strategies.