(Figure: Fire Prevention II) Elif and Mehmet own a home. Based on the figure provided, what will be the optimum number of actions (such as smoke detectors and sprinklers) to prevent fire in their house? Elif and Mehmet decide to purchase fire insurance that reduces the marginal benefit of taking precautions by $4 at every action level. How will the new policy affect the optimal number of precautions?

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The Answer of (Figure: Fire Prevention II) Elif and Mehmet own a home. Based on the figure provided, what will be the optimum number of actions (such as smoke detectors and sprinklers) to prevent fire in their house? Elif and Mehmet decide to purchase fire insurance that reduces the marginal benefit of taking precautions by $4 at every action level. How will the new policy affect the optimal number of precautions?

(Figure: Fire Prevention II) Elif and Mehmet Own a Home