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Required compensation Widgets Sold Disutility of effort (total, not marginal) 0 $0 1 $40 2 $222 3 $495 4 $860 5 $1'250 6 $1'750 7

Required compensation
Widgets Sold Disutility of effort (total, not marginal)
0 $0
1 $40
2 $222
3 $495
4 $860
5 $1'250
6 $1'750
7 $2'388
8 $3'117
9 $3'937
10 $4'849

Suppose that there is no uncontrollable risk, and the fixed setup cost is 0. The price of the widget is $7'000. The cost of producing an extra widget is $6'500. Suppose that a=-200, and the company is setting the incentives intensitybat $500 per unit of widgets sold. What is total pay for the employee?

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