Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Your company utilizes both employees (L) and specialized robots (R) in its production process. The hourly wage of employees is $35, and the hourly

1. Your company utilizes both employees (L) and specialized robots (R) in its production process. The hourly wage of employees is $35, and the hourly cost of operating a robot is $145. The table below describes how the number of each type of input affects output or product (in a marginal way).

Number of employees (L) Marginal product of labor (MPL) Number of robots (R) Marginal product of robots (MPR)
1 126 1 580
2 119 2 522
3 112 3 464
4 105 4 406
5 98 5 348
6 91 6 290
7 84 7 232
  1. Given the much higher productivity of robots, why would the company ever consider using employees at all in its production?

b. When it started out, the company used four employees and two robots; is this an ideal combination of inputs? Why or why not?

c. During its slow season, the company reduces its employees to three; what would be the optimal number of robots to use in this situation?

d. During the normal season when the company uses four robots, what would be the optimal number of employees to use?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Business Law

Authors: Jeffrey F. Beatty, Susan S. Samuelson, Patricia Abril

6th Edition

1337404349, 978-1337404341

More Books

Students also viewed these Economics questions

Question

Explain how to load a script responsively.

Answered: 1 week ago