Question

_____ is a system whereby the commissions average from 8 to 10 percent or are based on a sliding scale that becomes lower as the clients' media expenditures increase.

A. Negotiated commission system
B. Fixed-fee commission system
C. Cost-plus commission system
D. Incentive commission system
E. Pro-rata commission system

Answer 1

A Negotiated commission system is a commission structure where rates are predetermined and can vary, typically lowering as clients spend more on media purchases.

Step-by-step explanation:

The system described, where commissions average from 8 to 10 percent and are based on a sliding scale that decreases as the clients' media expenditures increase, is known as a Negotiated commission system. This type of commission structure is typically employed within advertising agencies or media buying firms, where the amount of commission earned is predetermined through negotiation and may be adjusted relative to the total amount spent on media purchases. The sliding scale is an incentive for larger clients to spend more, as their commission rates become progressively more favorable.