Your firm produces clay pots entirely by hand even though a pottery machine exis

Question

Your firm produces clay pots entirely by hand even though a pottery machine
exists that can make clay pots faster than a human. Workers cost $80 per day and
each additional worker can produce 20 more pots per day (i.e., marginal product
is constant and equal to 20). Installation of the first pottery machine would
increase output by 300 pots per day. Currently your firm produces 1,800 pots per
day.

a. Your financial analysis department estimates that the price of a
pottery machine is $2,000 per day. Can you reduce the cost of producing 1,800
pots per day by adding a pottery machine to your production process and reducing
the amount of labor? Explain why or why not.

Explanation / Answer

So what is the question here, please post the full question

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.