Question

8. Suppose you have hired a new worker, unfortunately you do not know if the worker is a shirker or a hard worker. Suppose working hard raises the probability of making a sale from 40% to 80% (thus raises the probability of making a commission C by the same percentage). If the cost of working harder is $150,what commission C should you offer the worker to provide an incentive to work hard. (5 points)

Answer 1

Solution- Guppoba Wrocking dead alaises the probability of making la sale flom 40%. to sot.. # The cost of Kloaking houder is $ 150, Working houdelaised the poehabiléty by 404 in.Ottese kulare de impacases the pleabability el commission ky 404, gf cost of working hand $450, it means that a || Reykere should be given thee incuement pleobability of 40% on the cast a The incentive should be $150 X 40% 150X40 canned with HamScanner = $60 cm