Question
You currently produce 100 units per week using 1 machine and 2 workers, and in the past you have produced 140 units per week using
You currently produce 100 units per week using 1 machine and 2 workers, and in the past you have produced 140 units per week using 1 machine and 3 workers. Based on other firms in your industry, you believe that you are industry with diminishing marginal product of labor and increasing returns to scale.
(a) Assuming you are correct, what must be true about your output if you produce using 1 machine and 4 workers?
(b) Assuming you are correct, what must be true about your output if you produce using 2 machines and 4 workers?
(c) If instead you have diminishing marginal product of labor and constant returns to scale, which of your two answers above changes, and what is the new correct answer
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