The manager of a home appliancecompany, where welding is a very common operation, is concerned that...

 

Transcribed Image Text:

The manager of a home appliancecompany, where welding is a very common operation, is concerned that too much pollution in the workplace may be negatively affecting employee morale. The manager believes that he may be able to increase labor productivity and therefore net revenue by reducing air pollution in the factory. He hired an economist to estimate the costs and benefits of reducing pollution that requires installing additional capital equipment. According to the economist, the total cost and total benefit of continuous pollution reduction are represented by the following functions: TB=170P-p2 And TC 100-10P+2P = Where P represents a reduction of polution in the factory. (Note: The MB and MC equations are: MB 170-2P and MC = 10 + 4P) (3 pts each) a. What is the obtimal pollution reduction the company should undertake? b. What is maximum value of the net benefit that can be generated? The manager of a home appliancecompany, where welding is a very common operation, is concerned that too much pollution in the workplace may be negatively affecting employee morale. The manager believes that he may be able to increase labor productivity and therefore net revenue by reducing air pollution in the factory. He hired an economist to estimate the costs and benefits of reducing pollution that requires installing additional capital equipment. According to the economist, the total cost and total benefit of continuous pollution reduction are represented by the following functions: TB=170P-p2 And TC 100-10P+2P = Where P represents a reduction of polution in the factory. (Note: The MB and MC equations are: MB 170-2P and MC = 10 + 4P) (3 pts each) a. What is the obtimal pollution reduction the company should undertake? b. What is maximum value of the net benefit that can be generated?

Answer rating: 100% (QA)

To find the optimal pollution reduction we need to equate marginal benefi... View the full answer