BUS 640 WK2 Assignment

BUS 640 WK2 Assignment - Chapter 3 Applied Problems 2, 4 2)...

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Chapter 3 Applied Problems 2, 4 2) Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR = 1,000 – 10P How much pollution reduction should Appalachian Coal Mining undertake? Marginal revenue will be equal to marginal cost, which Maurice and Thomas (2011) contends produces optimal activity level, if Appalachian Coal Mining undertook 20 units of pollution reduction. Units MC MR 1 40 990 2 80 980 3 120 970 4 160 960 5 200 950 10 400 900 15 600 850 20 800 800 4) Twentyfirst Century Electronics has discovered a theft problem at its warehouse and has decided to hire security guards. The firm wants to hire the optimal number of security
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BUS 640 WK2 Assignment - Chapter 3 Applied Problems 2, 4 2)...

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