Question
Suppose there are two ways to make sweaters. The first is traditional and labor-intensive; one person knitting for one day can make one sweater. The
Suppose there are two ways to make sweaters.
The first is "traditional" and "labor-intensive"; one person knitting for one day can make one sweater. The wage they must be paid is $100 per day.
The other way involves a knitting machine. Using a knitting machine each person employed in a factory can make five sweaters in a day. Workers are still paid $100 per day, but it costs $10,000 to acquire a knitting machine. You may assume that the yarn, and any other inputs other than the knitting machine and labor used to knit sweaters are free.
How large would the scale of sweater production have to be for acquiring the knitting machine to be less costly than hand-knitting sweaters?
Group of answer choices
83 sweaters
100 sweaters
125 sweaters
150 sweaters
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