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A company is considering new procedures to prevent the spread of germs at its factory. The proce has a fixed cost of A, and the

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A company is considering new procedures to prevent the spread of germs at its factory. The proce has a fixed cost of A, and the cost of hiring an additional worker, L, to clean the factory is w. company wants to avoid a factor closure which would cost B dollars and occurs with chance g If the company hires more workers, the chance of a factory closure is less. The company has expected cost function: B C(L) - A+wL+ where g( L) is a function which is strictly positive, decreasing in L, and convex. (a) (5) Find an expression for the marginal expected cost of hiring an additional worker, L. (b) (5) Find the amount of labour that minimizes expected cost. (c) (5) Perform a test to determine if your result in part b is a maximum or minimum. (d) (5) Suppose the cost of a closure, B, increases due a possible lawsuit if the factory closes. A else being equal, use calculus to determine whether the firm should increase, decrease, or no change the number of workers to minimize expected cost

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