1. If Donny and Sunshine both increase their capital equipment by one mixer and one fryer, the shop that will benefit the most from the expansion is <u>a. Donny, because his workers were not as busy to start with.</u>
2. The most realistic expectation that Donny should have about increased production with the new equipment is <u>a. At least 100 dozen.</u>
3. The most realistic expectation that Sunshine should have about increased production with the new equipment is <u>c. At least 100 dozen.</u>
<h3>Productive Efficiency</h3>
Based on the economic concept of productive efficiency, Sunshine cannot produce more than 90 dozen doughnuts per equipment daily, unlike Donny, which can produce 100 dozen doughnuts per equipment daily. When the equipment is increased by both producers, all things remaining equal, the production increases are as follows:
<h3>Data and Calculations:</h3>
Donny Sunshine
Dozens of doughnuts/per day 100 180
Number of mixer and fryer 1 2
Productivity per equipment set 100 90 (180/2)
Productivity per additional equipment 200 (100 x 2) 270 (90 x 3)
Thus, the conclusion is that Donny is more efficient in producing doughnuts than Sunshine, given that its workers can produce 100 dozen doughnuts per day, using one mixer and one fryer against Sunshine's 180 dozen doughnuts, using two mixers and two fryers.
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