An agency is having problems with personal phone calls made during working hours. Each minute of a personal call costs the agency $0.50 in wasted wages. The agency decides to hire operators to monitor calls in order to attain the optimal number of personal calls (minimize total cost of personal calls).
|
Number of Operators
|
Total minutes of personal calls
(per hour)
|
|
0
|
700
|
|
1
|
570
|
|
2
|
460
|
|
3
|
370
|
|
4
|
300
|
|
5
|
250
|
a. What is the most the agency would be willing to pay the first operator?
b. If operators receive $38 an hour, how many operators should the agency hire?
c. Assume a change in the operator labor market results in operator wages rising to $47 an hour; how would this affect the number of operators the agency should optimally hire?
d. Assume that operators receive $38 an hour again, but that the cost of personal calls rises to $0.75 in wasted wages. How many operators should the agency hire?