Suppose a Firm Has 10 Employees,all of Whom Desire a More

question 108

Essay

Suppose a firm has 10 employees,all of whom desire a more pleasant work environment.Accordingly,they are considering removing litter from the grounds of the plant.Each employee has an inverse demand for "clean grounds" of P = 100 - 2Q,where Q is the number of empty beer cans removed from the premises.The marginal cost of removing beer cans is $1 per can.
a.What is the socially efficient quantity of cans to remove?
b.How much would each person have to pay per can to remove the socially efficient quantity?

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Definitions:

Corporation

A legal entity that is distinct and separate from its owners, which can own property, incur liabilities, and is subject to taxation.

Cumulative Voting

A voting system in corporate governance that allows shareholders to concentrate their votes on a single candidate, enhancing minority shareholders' representation.

Minority Shareholder

An investor or shareholder who owns less than 50% of a company's shares, holding lesser voting power and control over corporate decisions compared to majority shareholders.

Extraordinary Measures

Extraordinary measures refer to unconventional or exceptional actions taken, often by governments or organizations, in response to critical and unusual situations.