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Consider the Salary of Mary Sue Nelson,a Sales Agent for Plain

Question 7

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Consider the salary of Mary Sue Nelson,a sales agent for Plain Truth Advertising.Her compensation package for a week is ,where Q is her dollar volume of sales.Her productivity is ,where e denotes her hours of effort and µ is a random variable with mean 0.She has an effort cost of .Under this contract,her choice of effort will be:


A) 0 hours per week.
B) 20 hours per week.
C) 40 hours per week.
D) 80 hours per week.

Correct Answer:

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