Suppose That the Marginal Benefit of Having a Security Camera

question 101

Multiple Choice

Suppose that the marginal benefit of having a security camera in the library is given by MB,at the supermarket is given by MB₁ and at the museum is given by MB₂.All values are per week.
Marginal Cost is given as MC.Suppose the only variable cost of a security camera is the wage of the person monitoring it.Suppose further that camera monitors demand equal wages,regardless of their location.If wages for all camera monitors are set at $T,

• A) all three locations will be served efficiently.
• B) the museum will hire more monitors than the efficient number and the supermarket will hire fewer monitors than the efficient number.
• C) only the supermarket will hire the efficient number of monitors.
• D) the library will hire too many monitors.

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Definitions:

Forecasting Method

Techniques used to predict future aspects of a business or the economy, from sales to macroeconomic trends.

AFN Formula

Additional Funds Needed formula; a financial model that projects the additional financing required by a firm to support its desired level of growth.

Dividend Payout Ratio

The proportion of earnings a company pays to its shareholders in the form of dividends, typically represented as a percentage of the company’s net income.

External Financing

Funding obtained from sources outside the company, including bank loans, issuance of equity or debt, and other borrowing avenues.