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)
0 600
1 480
2 410
3 370
4 350

a. If operators receive $25 an hour, how many operators should the agency hire?

b. What is the most the agency would be willing to pay the first operator?

c. Assume a change in the operator labor market results in operator wages rising to $38 an hour; how would this affect the number of operators the agency should optimally hire?

d. Assume that operators receive $25 an hour again, but that the cost of personal calls rises to $0.75 in wasted wages. How many operators should the agency hire