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A Stand-Up Paddleboard Outfitter Operates Without Insurance

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Essay

A stand-up paddleboard outfitter operates without insurance. The outfitter's marginal cost of safety (e.g., staff training, rescue equipment) is MCA = 100 + 14A. The marginal benefit of those actions is given by MBB = 200 - 6A, where A is the number of safety actions taken. What is the optimal number of precautions for this outfitter to take?


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