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I U 1. Your company utilizes both employees (L) and specialized robots (R) in its production process. The hourly wage of employees is $35, and
I U 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 $115. The table below describes how the number of each type of input affects output or product (in a marginal way). Number of Marginal product Number of robots Marginal product employees (L) of labor (MP1,) (R) of robots (MFR) 1 1 12 1 460 2 105 2 414 3 98 3 368 4 9 1 4 322 5 84 5 276 6 77 6 2 3 0 7 70 7 1 84 a. 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 busy season, the company increases its employees to ve; provided it had a sufcient budget, 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
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