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3 years ago

Old process New process

Business

1 answer:

Neporo4naja [7]3 years ago

8 0

Answer:

C. Use the old process.

Explanation:

Multi-factor productivity is nothing but the measure that gives clear picture about the overall efficiency based on the labor and capital inputs used in the production process.

Total cost = Labour cost + Capital cost

Total cost = $240 + $640

Total cost (old) = $880

Total cost (new) = $160 + $1000

Total cost (new) = $1160

Multi-factor productivity = Outlay per hour * 8 / Total cost per hour per 8 hours

MFP (old) = 100 * 8 / 880 = 0.91

MFP (new) = 125 * 8 / 1160 = 0.86

So, based on MFP, Use the old process as it is more efficient.

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