The Local Operations Manager for the IRS Must Decide Whether

question 54

Short Answer

The local operations manager for the IRS must decide whether to hire one, two, or three temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. $$\begin{array} { c c c c } \text { \# of Workers } & \begin{array} { c } \text { Low } \\\text { Compliance }\end{array} & \begin{array} { c } \text { Medium } \\\text { Compliance }\end{array} & \begin{array} { c } \text { High } \\\text { Compliance }\end{array} \\\hline 1 & 50 & 50 & 50 \\2 & 100 & 60 & 20 \\3 & 150 & 70 & - 10 \\\hline\end{array}$$
If he uses the maximin criterion, how many new workers will he hire?

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Definitions:

Monthly Profit

The total amount of income a business generates in a month after all expenses have been subtracted from total revenue.

Target Return

A pricing strategy where the price is set based on a desired return on investment for a product or service.

Higher Horsepower

Refers to engines or motors with greater capacity to produce power, typically resulting in enhanced performance or capability.

Right Price

The optimal price point for a product or service that balances profitability with customer satisfaction and demand.