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3. A nursing school has decided that, due to budget cuts, all document copying must be done in-house. Departments are allocated a charge of 8
3. A nursing school has decided that, due to budget cuts, all document copying must be done in-house. Departments are allocated a charge of 8 cents for each copy they make. The Chair of one department wants to outsource her copying to a for-profit copy center across the street from the school, for 5 cents a copy. The Chair believes this will save both the department and the school money. The Dean contends that the Chair does not understand marginal costs, and that the nursing school would actually lose money if the Chair uses the copy center across the street. a. The Dean is correct if the marginal cost for each copy made within the school is less than 5 cents. b. The Dean is correct if the marginal cost for each copy made within the school is more than 5 cents. c. The Dean is correct if the marginal cost for each copy made within the school is more than 8 cents. d. The Dean is incorrect, regardless of marginal costs
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