To better serve customers interested in buying cars over the Internet, Smart Motors, Inc., hired Nora Jones to respond to customer inquiries, offer price quotes, and write orders for leads generated by the company’s web site. During last year, Jones averaged 1.5 vehicle sales per week. On average, these vehicles sold for a retail price of $25,000 and brought the dealership a profit contribution of $1,000 each.
A. Estimate Jones( annual (50 workweek) marginal revenue product.
B. Jones earns a base salary of $60,000 per year, and Smart Motors pays an additional 28% of this base salary in taxes and various fringe benefits. Is Jones a profitable employee?