Presume working hard raises the probability of making sale

Reference no: EM13685413

Presume you have hired a new worker, unfortunately you do not know if the worker is a shirker or a hard worker. Presume 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 $200, what commission C must you offer the worker to provide an incentive to work hard? (Please show your work!)

Reference no: EM13685413

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