Question

You receive two job offers. One offers a straight commission of 6% of sales. The other offers a salary of $500 per week plus 3% of sales. How much would you have to sell per week in order for the straight commission job offer to be better?

Answer 1

You should sell above $16666 per week to earn more with straight 6% rate.

Step-by-step explanation:

6% amounts for 6 cents or 0.06 dollars (this is to maintain units) for every dollar you sell.

for 3% is 0.03 dollars per dollar plus the $500.

We represent each situation with an equation

gain_on_6% = 0.06*sales

gain_on_3% = 0.03*sales + 500

Equating these and solving for 'sales' will give us the value in which the gains are equal. Above that 6% will be more profitable.

This is shown in the following plot: