Q1. Suppose you are the sales manager at The Brick (a consumer irnishing and electronics store). You have a sales associate (an employee or agent) who is presently being paid a at salary of $1,000 per 40 hour work week as a sales associate. The associate nds that their cost of working is zero for 40 or fewer hours per week but is given by the expression C(e) = (V2)(e - 40)2 for levels of work (effort=e) greater than 40 hours per week. You notice that every hour of effort that the sales associate puts into work results in an additional $300 in sales. Assume that all of The Brick's inventory costs 40% less than the advertised price and these costs include everything except cost of sales staff. As the sales manager you decide to offer this sales associate an alternative contract one with an explicit incentive mechanism built into it. (A) If you offer the sales associate the opportunity to become a (commissioned) senior sales associate under an employment contract with the following terms. The associate can work as many (or as few) hours as they wish and will earn a at salary of $600 per week plus a commission equal to 5% of their sales. Will the sales associate take this new job? What will the rms level of prot be? (B) Suppose you offered them the same explicit incentive contract but instead offered them a at salary of $400 per week plus a 5% commission. Now will the sales associate take this new job? What will the rms level of prot be? (C) Suppose you offered them the same explicit incentive contract but instead offered them a at salary of $200 per week plus a 5% commission. Now will the sales associate take this new job? What will the rms level of prot be? (D) Suppose you offered them the same explicit incentive contract but instead offered them a at salary of $200 per week plus a 7.5% commission. Now will the sales associate take this new job? What will the rms level of prot be? (B) What incentive contract terms maximize the rms prot? Explain. What is the level of effort and prot that results