Question
Anne and Beth work for SES Financial (a firm that sells Economic Forecasting Service Contracts - EFS). Their productivity measures per a 40 hour work
Anne and Beth work for SES Financial (a firm that sells Economic Forecasting Service Contracts - EFS). Their productivity measures per a 40 hour work week are as follows: Anne is capable of selling 20 EFS Contracts in 40 hours OR underwriting 10 EFS contracts in 40 hours. Beth is capable of selling 40 EFS Contracts in 40 hours OR underwriting 80 EFS contracts in 40 hours. What is the Maximum amount Anne and Beth can make per week working alone? What is the Potential Gain from Cooperation if they trade services? Is a compensation payment between Anne and Beth necessary to secure cooperation? What happens to Dead Weight Loss(es) if they cooperate? Show the table of, and explain, your calculations. Payment received on the completed execution of an EFS contract is $1500 per contract the sales commission received is $1000 and the underwriting fee is received is $500. To receive payment the EFS contract must be sold and underwritten in the same 40 hour work week.
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