Question

In: Economics

You are a car sales person. A first time car buyer comes into where you work...

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?

Solutions

Expert Solution

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.


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