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Suppose customer satisfaction depends on the number of customer service representatives I hire. After careful data collection, I estimate the particular relationship to be: CS

  1. Suppose customer satisfaction depends on the number of customer service representatives I hire. After careful data collection, I estimate the particular relationship to be:

CS = 70 + 4R - .2R2.

Where CS = a customer satisfaction score on a scale of 0-100, and R is the number of customer service representatives I hire. Suppose I am interested ONLY in maximizing my customer satisfaction score by choosing a number of customer service representatives.

A) Graph this function and define and describe (in economic terms!) the intercept and slope.

B) What level of R would maximize CS? What is the maximum CS score achieved? Show all your work and explain the economics behind the steps!

C) What could the firm do to increase the intercept from 70 to 80? Explain fully.

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