Thomas Lee Corp. has a fertilizer plant. The probability of an explosion at the plant depends...

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Thomas Lee Corp. has a fertilizer plant. The probability of an explosion at the plant depends on how much the firm spends on safety as given by the table. If an explosion occurs, the loss to society (damaged equipment, death of employees, etc.) is expected to be $250 million. Safety Expenditure (million$) 0 Probability of Loss 0.03 Find the optimal level of safety from a societal perspective. 0.5 1 1.5 2 0.02 0.016 0.013 0.011 2.5 0.01 Thomas Lee Corp. has a fertilizer plant. The probability of an explosion at the plant depends on how much the firm spends on safety as given by the table. If an explosion occurs, the loss to society (damaged equipment, death of employees, etc.) is expected to be $250 million. Safety Expenditure (million$) 0 Probability of Loss 0.03 Find the optimal level of safety from a societal perspective. 0.5 1 1.5 2 0.02 0.016 0.013 0.011 2.5 0.01

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