Assingment 4 Coursework Example | Topics and Well Written Essays - 500 words

Assingment 4 - Coursework Example Example: Suppose a firm produces 1000 units with 10 laborers, remember the main objective of any firm is to maximize revenue, the management may opts to hire more workers to increase output which will lead to an increase in profit but if the contribution of 11^th worker will lead to a decrease in output, then it will only be important to employ enough employees who maximize the output without causing the marginal product to diminish. Largo Publishing House is not making the optimal choice on input amounts. This is due to the fact that there is underestimation of printers employed. A simple calculation can prove this. If the last printer can add 20 books to the total output and press is adding 1000 books, if you take (1000/2 = 50). This shows that fifty (50) printers can be used to do the work of one printing press machine hence the publishing house will be saving $ 4000. cost of one machine is $600.This indicates that the company should not install the textile machine since its total cost overweight’s hand labor cost which is $1350 compared to machine cost which amounts to $1500. i.e. ($1500