In: Economics
You are a car sales person. A first time car buyer comes into where you work and tells you upfront that they are looking for a basic model car. Since you are paid on commission, the more the price of the car you sell means the more you will get. What would you do?
Suppose I am a car sales person. Since I am paid on commission basis, this means that the more the price of the car, the more I will get. Now since the car buyer is coming to buy a car for the first time it is obvious that he would not want to go for a very high end model and would start with a basic model. But still I will try to persuade him to go for a medium range car by telling him that he will get better features and more comfort and it would match his status and his class. I will try to convince him and attract him with the special features that the basic model does not offer and that he can get by spending a little extra money. But if the buyer does not seem to be interested in buying a higher version and still wants to go for a basic model only then I wouldn't push him much and would show him the basic models. This is because no sales means no income for me as I am paid on commission basis. So in order to get more commission I cannot lose the basic commission that I can earn. So I would suggest him to go for a higher version but if the buyer is still interested in the basic version I wouldn't waste my time and show him the basic model cars and try my best to sell the car to the buyer.