Assume that manufacturer of cameras sells the cameras thorough retailers. The nu

Question

Assume that manufacturer of cameras sells the cameras thorough retailers. The number of cameras sold at each retailer is a function of the price of the camera (p) and the amount of selling effort that retailer puts out (e). Hence sales = D(p,e).

Question: Examine whether the retailer will have the correct incentive to devote the level of effort to the sale of cameras that maximizes the profits of the manufacturer. In your answer assume that u(e) is the function that measures the disutility cost of effort.

Explanation / Answer

if the percentage of price offered to retailer is greater than u(e) than he would give the effort :)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---