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Larry Has Decided to Go Back to His Hometown of Mellonburg

Question 29

Multiple Choice

Larry has decided to go back to his hometown of Mellonburg and set up an architectural design business for "green" homes.Mellonburg is a depressed farming community of 1,351 residents.It is 20 miles from the nearest restaurant,70 miles from the nearest Starbucks coffee shop,and the local schools are the worst in the state.The winters are severe,the summers are oppressive.Few single people live there,and the social and cultural life is negligible.In order to attract good quality architects,Larry will probably


A) need to ignore the market compensation for architects and pay the architects on an entitlement basis.
B) be able to lag the market significantly in pay because of the low cost of living.
C) have pay more than the market because of the unappealing location.
D) make market comparisons irrelevant by hiring the architects as independent contractors.

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