Question 2. A suggestion is made to increase the capacities of machines 1 and 2 at the

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Question 2. A suggestion is made to increase the capacities of machines 1 and 2 at the additional cost of $10/hr. Is this advisable?

For machine 1, the additional net revenue per hour is 14.00 - 10.00 = $4.00 and for machine 2, the net is $2.00 - $10.00 = -$8.00. Hence, only the capacity of machine 1 should be increased.

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