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5. Comet Securities offers its employees a salary of $100,000 per year regardless of the number of clients that an employee attracts to the firm.
5. Comet Securities offers its employees a salary of $100,000 per year regardless of the number of clients that an employee attracts to the firm. Galaxy Financial pays its workers a commission per client each worker attracts to the firm. The number of workers that are attracted to the firm is a function of ability, A, and takes on the following form: Q=VA = Ability assumes values between 0 and 100. (a) (5 points) The managing partners at Galaxy Financial decide they want to hire workers with a minimum ability level of 64. Workers at galaxy financial must pay $10,000 in administrative support per year. Determine the minimum commission rate that must be offered to attract workers that meet the ability requirement to Galaxy Financial. (b) (2 points) Assume that the minimum ability requirement holds for Galaxy Financial. If the firm outsources administrative support and the cost per year decreases, then what happens to the com- mission rate
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