Which of the Following Statements About the Straight Commission Compensation

question 75

Multiple Choice

Which of the following statements about the straight commission compensation plan is true?

• A) Financial administrators believe that commission compensation plans are anxiety producing and often try to dissuade organizations from implementing such a plan
• B) Straight commission compensation is appropriate for companies that require its sales force to engage in missionary selling
• C) Commission compensation plans are especially advantageous for companies that are short of working capital
• D) Salespeople on a straight commission plan are more likely to engage in making cold calls than salespeople on a straight salary plan
• E) Straight commission compensation plans are inherently unfair

Distinguish between positive and normative statements in economics.

Recognize the impact of government policies and regulations on the economy.

Understand the role and influence of economists and economic advisory bodies in government policy.

Identify the types of graphs used in economics and understand their applications.

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Definitions:

Short-Run Equilibrium

Short-run equilibrium occurs when in a market, the quantity supplied equals the quantity demanded at the current price, before any long-term adjustments are made.

MR > MC

A situation in marginal analysis where the marginal revenue (MR) exceeds the marginal cost (MC), suggesting a potential increase in profitability by expanding production.

P > ATC

A scenario in which the price of a good is greater than the average total cost of producing that good, indicating potential profitability for the firm.

Short Run

A period in economic analysis where at least one input is fixed while others can be varied.