A Good Salesperson Can Sell $100,000 Worth of Goods,while a Poor

Multiple Choice

A good salesperson can sell $100,000 worth of goods,while a poor one can sell only $10,000 worth of goods.Job applicants know if they are good or bad,but the firm does not.A firm will offer job applicants a choice between a fixed salary of $2,000 or a commission on the sale.Assume risk-neutral salespersons and no opportunistic behavior.Given that the firm wants to distinguish a prospective good salesperson from a poor one,what should be the commission on sales?

A) Commission should be larger than 50%.
B) Commission should be larger than 40%.
C) Commission should be between 2% and 20%.
D) Commission should be smaller than 2%.