Question 17 (1 polne D This table below reflects the monthly total benefits and

Question

Question 17 (1 polne D This table below reflects the monthly total benefits and costs of hiring security guards ata department store. Total benefits are measured In terms of the value of theft deterred. and total costs are d by the $2.,400 monthly wage pald to each guard Total Number of Guards Total Benefit Total Cost $2,400 $4,800 .200 $7.100 9,000 Department stores such as this should generally accept some level of theft because Criminals will always steal no matter what Qualifed security guards are generally in short supply At some point, the marginal cost of hiring additional security guards is greater than the savings from actual reduction in theft Page 17 of 17

Explanation / Answer

Here the marginal cost of hiring extra one labor is $2400 and it is constant. If the security guard is high enough there is less possibility of theft. But department stores have to accept that supply of qualified security guard are always in short supply. So they hire very less number of the security guard. The second option is correct

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