The Chair of the Economics Department at State U says that fundraising employees should be hired as long as their marginal benefit exceeds their marginal cost. If the University follows this advice, then employee(s) will hired, and the net benefit (total donations minus total labor costs) will be .

The accompanying table below shows how total donations, average donations, total labor costs and average labor costs vary depending on the number of employees State U hires for its fundraising activities.

Number of Employees Total Donations Average Donations Total Labor Costs Average Labor Costs

1 $30,000 $8,000

2 $42,426 $17,000

3 $17,321 $27,000

4 $60,000 $9,500

5 $13,416 $50,000

maryamfayyaz116 maryamfayyaz116 · Answer 2 · 2020-03-31T03:30:32+02:00

maryamfayyaz116 maryamfayyaz116

31-03-2020

Hence, the table is missing in this question. I have attached it in a word file.

Answer:

2 , $25,426

Explanation:

According to the table, only the row of 2 employees has a higher marginal benefit (i.e. $12,426) than marginal cost (i.e. $9,000).

By following 2nd row:

Net benefit = Total donations - Total labor costs

Net benefit = $42,426 - $17,000

Net benefit = $25,426

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