An american executive of a multinational home-furnishings chain finds that one of the company's production units in philippines employs children to work in its factories. however, most of the children employed at the factory are orphans who will be sold as forced labor or pushed into prostitution, if they lose their jobs. the executive finds that all the available alternatives seem ethically unacceptable. in this example, the american executive faces the free-rider problem. an ethical dilemma. a veil of ignorance. the tragedy of the commons.

The monthly demand equation for an electric utility company is estimated to be p equals 60 minus left parenthesis 10 superscript negative 5 baseline right parenthesis x, where p is measured in dollars and x is measured in thousands of killowatt-hours. the utility has fixed costs of $3 comma 000 comma 000 per month and variable costs of $32 per 1000 kilowatt-hours of electricity generated, so the cost function is upper c left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 32 x. (a) find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (b) suppose that the rising fuel costs increase the utility's variable costs from $32 to $38, so its new cost function is upper c 1 left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 38 x. should the utility pass all this increase of $6 per thousand kilowatt-hours on to the consumers?