P2.1 Marginal Analysis: Tables. Climate Control Devices, Inc., estimates that sales of defective thermostats cost the firm

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P2.1 Marginal Analysis: Tables. Climate Control Devices, Inc., estimates that sales of defective thermostats cost the firm $50 each for replacement or repair. Boone Carlyle, an independent engineering consultant, has recommended hiring quality control inspectors so that defective thermostats can be identified and corrected before shipping. The following schedule shows the expected relation between the number of quality control inspectors and the thermostat failure rate, defined in terms of the percentage of total shipments that prove to be defective.

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Managerial Economics

ISBN: 1518

14th Revised Edition

Authors: Mark Hirschey

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