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 has decided to alter the compensation to a percentage of the profit earned per new store. The company should expect to
a. Pay the consultants more than they would per store
b. Pay the consultants less than they would per store
c. Pay the consultants the same
d. None of the above
Question 2
A demand for a product is more elastic
a. When it has few substitutes
b. In the long-run
c. When the expenditure on the product represent a small portion of the budget
d. When the product is broadly defined
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