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Susan Jones is a salesperson at Radex Co. Her utility function can be represented by U = C 2, where C is her compensation.
a. The company is considering paying her a sales commission rather than a straight salary. The sales manager, however, is concerned that he will have to pay her a compensating differential for imposing risk on her, that is, beyond her control (sales at Radex are heavily dependent on macroeconomic factors and central company policies). Is the sales manager's concern about paying Susan higher compensation justified? Explain.
b. Is this example representative of the typical worker in most companies? Explain.
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1.Why, under oligopoly, might a particular industry be collusive at one time and yet highly price competitive at another?
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Given that business operations have changed from the market structure specified in the original scenario in Assignment 1, determine two (2) likely factors that might have caused the change. Predict the primary manner in which this change would likely..
Analyze the principal forces acting upon the supply and demand the company is experiencing, using any financial information you feel is relevant.
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