economics marginal cost analysis
posted by b182 on .
Vaska Electronics has discovered a theft problem at its warehouse and has decided to hire some security guards. The following table shows the number of security guards and the amount of theft per week:
(#of security guards)(#of stolen radios)
The cost of stolen radio is $25 and a security guard costs $200 per week.
A) How many guards should Vaska Electronics hire?
B) What is the most that Vaska Electronics would be willing to pay for the first security guard?
C) Suppose the cost of a stolen radio is $50. How many security guards would Vaska Electronics hire if each security guard costs $200 per week?
A spreadsheet could do this easily.
#guards CostGuards StolenRad costrad Total cost
do that spreadsheet for guards 0 to 6, and compute total cost for each (total cost=costradiosstolen+ guardcost
It seems to me that some simple arithmetic will answer your questions.