1. Joan starts a Bakery in St. Peter, MN. She uses baker and baking machine to produce bread. Hiring a new employee costs $1500 per month.Each baking machine costs $5000. Which method should he use and why? Labor and baking machine are substitute to each other. Therefore, buying more machines means hiring less bakers andvice-versa.Below are the four possible combinations. Which combination will Joan choose?

Method 1

20 bakers

5 machines

Method 2

12 bakers

10 machines

Method 3

15 bakers

8 machines

Method 4

18 bakers

7 machines