Answer to Question #80291 in Economics for SANJANA MONEBHURRUN

Question

suppose that you are offered a job selling nature books from door to door, and that the company offers a choice of either R350 per week, or R200 per week plus 2% of the value of all sales, or R80 per week plus 4% of all sales. the choice is difficult decision since you are unsure as to the value of the sales made each week, calculate the best choice, if the value of the sales made each week is R8000.

Answer 1

If the value of the sales made each week is R8000, then:
1) R350 per week,
2) R200 per week plus 2% of sales or 200 + 8000*0.02 = R360 per week,
3) R80 per week plus 4% of sales or 80 + 8000*0.04 = R400 per week.
So, the best choice is R80 per week plus 4% of sales.