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Assume That an Additional $50,000 in Benefits Will Be Received

question 125

Essay

Assume that an additional $50,000 in benefits will be received each year if a town hires an additional police officer whose only job would be to catch drivers who drive over the speed limit on its only street.What must the additional cost of this additional police officer be to make this hiring economically rational?


Definitions:

Industry

A group of companies and organizations involved in the production, processing, and distribution of goods and services in a particular sector of the economy.

Marginal Costs

The amplification of total charges incurred from producing an incremental unit of a product or service.

Upward

Referring to a direction or trend that indicates an increase, improvement, or rise in position or value.

Industry Demand Curve

Represents the total demand for a product or service across all consumers in a given market, showing how quantity demanded varies with price.

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