Question
Calculate the per-unit opportunity cost of producing Widgets at each facility. That is, find the implied# of Doohickeys given up foreach 1 individual Widget produced
Calculate the per-unit opportunity cost of producing Widgets at each facility. That is, find the implied# of Doohickeys given up foreach 1 individual Widget produced at that facility.
Your company owns 3 production facilities in Louisiana, located in Alexandria (A), Baton Rouge (B), and Chalmette (C).Each facility produces either doohickeys (D),thingamajigs (T),and widgets (W).
These three products are themselvesinputs into a final production process that produces Good "X", a finished end-product which the company then sells to retail consumers.
Each type of component is required in equal quantities for the final production process, so total company-wide productive output of Xdepends on producing as many as possible of each of the 3 input goods.
Each facility's possibleproductive output per hour is given below.Any given facility can only produce one thing at a time. For example, Alexandria can make 20 Thingamajigs per hour, or one every 3 minutes.
OUTPUT | Doohickeys | Thingamajigs | Widgets |
Alexandria | 60 | 20 | 12 |
Baton Rouge | 75 | 30 | 25 |
Chalmette | 90 | 30 | 45 |
For any given facility considered in isolation, the "next best alternative" to producing either Thingamajigs or Widgets would be to produce Doohickeys instead (since the quantity able to be produced is so high).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started