Question

A copy company wants to expand production. It currently has 20 workers who share eight copiers. Two months ago, the company added three copiers, and output increased by 150,000 pages per day. One month ago, they added six workers, and productivity also increased by 60,000 pages per day. Copiers cost about twice as much as workers. As a manager, would you recommend they hire another employee or buy another copier?

Answer 1

Answer:

Buy another copier

Explanation:

Given that

20 workers = 8 copiers

20 workers = 11 copiers = output rise by 150,000 pages per day

26 workers = 11 copiers = output another rise by 60,000 pages per day

Now for 3 copiers, the output rise by 150,000

For 1 copier it would be rise by 50,000

And, for extra 6 workers, the output rise by 60,000

So for extra 1 worker, it would rise by 10,000

So it can be said that

When 1 copier is acquired than output rise by 50,000

And, the company could hire 2 workers, so 2 workers, the output would be 20,000

i.e.

50,000 > 20,000

Therefore buying another copier should be best recommended as marginal productivity of copier is greather than the marginal productivity of labor