X PDF 629414 chapter 6 pages 206, 214 X PDE 629414 chapter 5.pdf X (PDE Richard A. Musgrave, Peggy Bos X + . . . File | C:/Users/LAKSH/Downloads/629414%20chapter%205.pdf + A Read aloud | Draw V Erase 13 of 36 168 Part 2 Managerial Economics ANALYZING MANAGERIAL DECISIONS: Choosing the Mix of People and Machines in a Retail Supercenter You manage a large retail supercenter that sells gro- ceries and other products to 30,000 customers per 2. Plot the input combinations in the table on a week. Currently, you employ 80 check-out clerks graph that contains clerks on the vertical axis and 10 automated check-out machines (customers and machines on the horizontal axis. Connect scan and pay for their purchases without a clerk's the points by lines to approximate an isoquant assistance). Each clerk is paid wages and fringe as pictured in Figure 5.6. Add the cost mini- benefits of $800 per week. It also costs you $800 per mizing isocost curve to the graph (you can week to lease each machine (price includes installa- derive this line from the input prices and the tion, software support, and servicing). A vendor total cost of the low-cost input combination). has offered to lease you additional machines at this How do the slopes of the isocost curve and isoquant compare at the optimal input price. You estimate that by leasing 10 more ma- combination? chines you can meet your service requirements with 3. 30 fewer clerks. Should you lease the additional ma- Suppose that the marginal product of clerks at the optimal input combination is 500. chines or continue to service your customers with Explain in words what this means. What is your current input mix? the marginal product of machines at this 1. You conduct additional analysis and estimate point? Explain why. that you can service the 30,000 customers with 4. Suppose that the cost of leasing a machine the following combinations of clerks and ma- declines to $500 per week. What is your new chines. Calculate the total costs for each of these optimal input mix? How does this affect combinations. What combination of inputs your graph? serves the customers at the lowest possible cost? 5. Are there any other factors that should be considered in making this decision on the Clerks Machines optimal mix of machines and clerks Discuss briefly. 80 10 50 20 30 30 40 50 60 1 8 0 4x ENG 15:41 Type here to search O S 4 W 21-07-2020