A payday loan company has decided to open several new locations in the city.To decide where to open these locations it hires consultants and pays them per store opened.At the end of the quarter,the company notices a many of the new stores' sales volume fail to meet expectations.To incentivize the consultants to instead focus on opening profitable stores,the company should have paid them

Question

​A payday loan company has decided to open several new locations in the city.To decide where to open these locations it hires consultants and pays them per store opened.At the end of the quarter,the company notices a many of the new stores' sales volume fail to meet expectations.To incentivize the consultants to instead focus on opening profitable stores,the company should have paid them

Quizplus · Accepted Answer

Paying the consultants a percentage of the profit earned per new store would incentivize them to focus on opening profitable stores rather than just opening as many stores as possible. This would ensure that the company is not wasting resources on underperforming stores and instead investing in locations that generate revenue. Paying a fixed salary or per store opened would not necessarily motivate the consultants to prioritize profitability over quantity.

​A Payday Loan Company Has Decided to Open Several New

A Payday Loan Company Has Decided to Open Several New