A Good Plan for Compensating a Sales Force Should

question 24

Multiple Choice

A good plan for compensating a sales force should:

• A)Strive to correlate a sales representative's rewards with his or her results and efforts.
• B)Provide a regular (steady)income or an incentive income,but not try to do both.
• C)Equate the level and the method of compensation.
• D)Discourage a sales representative from spending time on non-selling activities.
• E)Not be used to control sales force activities.

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Definitions:

Constant-cost Industry

An industry in which the costs of production do not change as the industry's total output changes.

Competitive Market

A market where there are many buyers and sellers so that no single buyer or seller can influence the price or market conditions.

Economic Profits

The variance between a corporation's total earnings and all its explicit and implicit expenditures.

Zero-profit Equilibrium

A situation in a perfectly competitive market where firms just cover their costs, leaving no surplus for economic profit.