The optimal amount of product safety in automobiles may be less than the amount that would totally eliminate the risk of accidents and deaths if the marginal cost of providing the extra units of safety exceeds the expected marginal benefit received from the extra safety. the marginal cost of providing the extra units of safety is less than the expected marginal benefit received from the extra safety the average cost of providing the extra units of safety exceeds the expected average benefit received from the extra safety the average cost of providing the extra units of safety is less than the expected average benefit received from the extra safety

The optimal amount of product safety in automobiles may be less than the amount that would totally eliminate the risk of accidents and deaths if the marginal cost of providing the extra units of safety exceeds the expected marginal benefit received from the extra safety. the marginal cost of providing the extra units of safety is less than the expected marginal benefit received from the extra safety the average cost of providing the extra units of safety exceeds the expected average benefit received from the extra safety the average cost of providing the extra units of safety is less than the expected average benefit received from the extra safety

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use economic analysis to explain why the optimal amount of product safety may be less than the amount that would totally eliminate the risk of accidents and deaths. Use automobiles as an example.
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